Norges Bank

Norges Bank’s financing agreement with Sedlabanki Islands

In May 2008 Norges Bank and Sedlabanki Islands agreed on a swap facility entitling Sedlabanki Islands to borrow EUR 500 million when and if the need arises. The agreement was set to mature on 31 December 2008. Norges Bank announced on 3 November 2008 that the agreement would be extended to 31 December 2009 on certain conditions. At the same time, Norges Bank expressed its willingness to offer Sedlabanki Islands a medium-term loan of EUR 500 million with a maturity of up to 5 years. This loan would require a state guarantee. In a press release of 3 November 2008 from the Ministry of Finance, Minister of Finance Kristin Halvorsen stated that the Government would submit a proposal to the Storting as soon as possible for a state guarantee for such a loan.

Norges Bank also made its loans conditional on the IMF Executive Board’s approval of Iceland’s Stand-By Arrangement and financing from other countries. These conditions have now been fulfilled. On 19 November 2008, the IMF’s Executive Board approved Iceland’s Stand-By arrangement. Reference is made to the IMF website. In a joint statement of 20 November 2008, the Ministers of Finance in Denmark, Finland, Norway and Sweden stated that these Nordic countries had decided to provide medium-term financing to Iceland within the framework of the IMF-supported program. Reference is made to the website of the Ministry of Finance.

On 20 November 2008, Sveriges Riksbank and Danmarks Nationalbank also extended their swap agreements with Sedlabanki Islands.

Published 20 November 2008 17:00