Swedish banks cold shoulder govt's debt guarantee plan

Nordea AB, Svenska Handelsbanken AB and SEB AB, Sweden's biggest banks, are drawing fire from government officials for shunning the state's plan to bolster the financial system by guaranteeing their debt.

The three banks, which dodged the worst of the global credit crisis, have yet to use the program, announced Oct 20. Finance Minister Anders Borg, who was scheduled to meet the banks yesterday, has threatened "harsher" terms to get them to go along. Financial Markets Minister Mats Odell has called the banks "free-riders."

The lack of participation in the 1.5 trillion-krona ($187 billion) guarantee plan breaks with a Swedish tradition of consensus policies, where companies, trade unions and politicians typically cooperate. While banks say the plan may give the state too much clout over their strategy, politicians and business executives contend the program will make banks more willing to lend, thereby helping companies and stimulating economic growth.