The financial authorities of Sweden, which refused to introduce quarantine due to the spread of the coronavirus, actually admitted that the country’s banking system does not have enough money amid the pandemic, writes Bloomberg. The local central bank is expanding its quantitative easing (QE) program.
Now the volume of the QE program will be 700 billion Swedish kronor (82 billion dollars), which is 200 billion more than originally planned. With this newly released money, the regulator will buy government and corporate bonds from commercial banks, thereby providing the latter with funds to expand lending to businesses and the population.
The Central Bank said in a statement that the coronavirus pandemic “continues to dominate the development of the global economy.” GDP growth projections are being revised down not only in Sweden, but also in other countries around the world. The regulator plans to accelerate the pace of purchases of securities under the easing program in the first quarter of next year.
Sweden has become one of the few countries (and the only one in the European Union) that did not impose severe restrictions due to the spread of the coronavirus. The country’s authorities stressed that they are striving to develop collective immunity among the population and do not want to allow damage to the economy. Financiers have expressed different points of view regarding the results of such a policy and have not yet reached a consensus on whether it has produced a result.