The Central Bank of Sweden has granted Kaupthing, Iceland’s largest bank, a SEK 5 billion (USD 701 million, EUR 514 million) loan, to ensure that the bank can live up to its commitments towards the customers of Kaupthing’s Swedish branch.
According to ruv.is, the Swedish Central Bank evaluates Kaupthing Bank’s position as strong.
An announcement from the Swedish Central Bank also states that the loan is part of the bank’s extensive assistance to the entire banking and financial system in Sweden, visir.is reports.
“The Icelandic banking sector has gone through stringencies in the past days. The circumstances have made it difficult for Kaupthing in Sweden to live up to its commitments,” the statement reads.
“The bank was at risk of credit crunch. To protect the economic stability in Sweden and ensure the operations of the financial market Riksbanken [the Central Bank of Sweden] has decided to support Kaupthing in Sweden with liquid assets,” the statement concludes.