Norway tries to retain bank guarantees

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Finance Minister Sigbjørn Johnsen was in Brussels and Paris last week to lobby for retention of Norway’s generous bank deposit guarantees. He didn’t win any immediate promises from officials at the EU.

Deposits are insured for up to NOK 2 million (around USD 330,000) at Norwegian banks. That’s more than triple the guarantee amounts in the US and also much higher than the EU level of EUR 100,000, which equates to around NOK 800,000.

“They’re listening to us, but we didn’t get any promises,” Johnsen told newspaper Aftenposten. His ministry and the Norwegian government want an exception to the EU’s maximum level of EUR 100,000, which Norway otherwise would need to follow because of its trade treaty with the EU.

“We can’t see that (the higher Norwegian deposit guarantees) hurts competition,” Johnsen said. “Norway is also the only country that would have to reduce its level dramatically.”

Norway’s bank guarantee was last set during the banking crisis of the early 1990s, as a means of restoring faith in the country’s banking system and preventing runs on the banks.

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