The government is struggling to maintain Norwegian bank guarantees

Norwegian money property taxNorwegian money. Photo: pixabay.com

A high level of domestic bank guarantees secures Norwegian customers a refund of up to two million if the bank collapses.

The Government are working to preserve the warranty.

Today’s EU deposit guarantee directive allows for only a repayment of 100,000 euros, about 880,000 kroner, so the Norwegian scheme guarantees more than twice as much.

The EU directive should also apply to Norway, which for several years has fought a seemingly fruitless battle to retain the special scheme.

Undersecretary at the Ministry of Finance, Tore Vamråk (Høyre), said in an email to Nationen newspaper that the government is still actively working on the case.

‘We have received approval for Norway to continue the level of two million until the end of 2018. The Government will work with the EU in trying to bring about a lasting solution’, he said.

The EU directive is being considered by the European Free Trade Association’s (EFTA) expert group, and there is no date set for when it will enter the European Economic Area (EEA) Agreement.

The Norwegian deposit guarantee was introduced in 1996. In a report from the Financial Crisis Commission of 2011, it was pointed out that the guarantee had acted to dispel unrest and panic, including during the financial crisis.

If the guarantee is reduced to the EU level, around 200,000 bank customers in Norway would lose full coverage for their deposits,and 100,000 would receive reduced coverage, according to calculations from the Finance Department in 2013.

 

Source: NTB scanpix / Norway Today

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