February 3, 2009

Sweden announces $6 billion rescue package

The Swedish government said Tuesday it added $6 billion to its bank rescue package to help spur lending.

Getting the credit markets working again is essential to avoid a worsening of the economic downturn, said Swedish Finance Minister Anders Borg and Financial Markets Minister Mats Odell said in a statement.

The purpose of the capital infusion program is to increase the banks' ability to provide households and companies with credit at reasonable terms, the statement said.

The government said it would exchange the fresh capital for up to 70 percent of new share issues under market pricing, Tidningarnas Telegrambyr reported Tuesday.

The funds also come with a hitch. Banks accepting funds from the package must agree to freeze executive and board pay and skip bonus payments for two years.