The Swedish government pledged on Saturday to provide liquidity guarantees to power companies in a bid to avert a financial crisis triggered by Europe’s energy crisis.
Worth “hundreds of billions” of Swedish kronor, the safeguards have been designed to help companies struggling to meet the increasing requirements for safeguards needed to trade in electricity and will be in place before markets close. fellows on Monday.
According to the Swedish government, soaring prices in Europe have made it more expensive for utilities to buy and sell electricity due to the additional requirements needed to secure transactions in the electricity markets, which has caused in turn a lack of liquidity for utilities, exposing them to the risk of insolvency.
Swedish Prime Minister Magdalena Andersson told a press conference in Stockholm on Saturday that swift action was needed, warning: “If we do not act, there is a serious risk of disruptions in the financial system, which in the worst case, might lead to a financial crisis”.
The guarantees will be extended to utilities in other Nordic and Baltic countries registered with Nasdaq Clearing, Andersson also said.
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