Finland presents $72 bn bank rescue package

HELSINKI: The Finnish Government today presented a plan worth USD 72 billion aimed at shoring up the financial sector in case the global credit crisis takes a heavier toll.

The new plan aimed "to secure banks' long-term financing and to support their financial standing," the finance ministry said in a statement.

Finland, which so far has escaped virtually unscathed from the ongoing financial turmoil, vowed after a eurozone meeting last week to introduce new legislation enabling it to guarantee bank loans and to invest state capital in banks in case the crisis hit it harder.

The finance ministry said today it had estimated the Nordic country could guarantee bank loans for up to 50 billion euros, while the state's capital investments in banks would not exceed four billion euros. "Because Finnish banks have not presented a need for this kind of financing, it is very difficult to estimate the amount of money that should be set aside," the ministry said.

If needed, banks could receive state aid against a fee, it said, reiterating however that Finnish banks were financially sound. The planned measures would remain in place until the end of next year but would be reviewed in April 2009, the ministry said. The government aims to submit its rescue package plan to Parliament in the coming weeks.