Sweden’s central bank, the Riksbank, has agreed to support the Swedish branch of the Icelandic Kaupthing bank with a temporary loan of 700 million dollars. A Riksbank spokesman said the loan will be used to secure private savings and other claims. Kaupthing has a number of affiliate banks in Sweden.
The announcement came as trading with shares of the Icelandic bank at the Stockholm stock exchange was halted after heavy losses. The downward trend of the Swedish stock market was continuing on Wednesday. After a 7 percent drop shortly after opening, there were signs of a slight recovery later in the day.