Liquidity guarantees mean that the state gives a promise to add money if needed, explains John Hassler, professor of economics at Stockholm University.
- The idea of liquidity support is that the companies should not really have to use them.
You give guarantees to companies and other institutions that you think are sound but which are currently having difficulty getting money for their operations.
Hassler says that it is impossible for him to assess how urgent the situation is, but if the government and the authorities' assessment is correct, he believes that the proposal is good.
- The assessment is made that the situation is so serious that it could have triggered bankruptcies in some companies as early as Monday, and it is believed that this could spread to other parts of the financial system.
If you make that assessment, it is important to act quickly, in much the same way as you are doing now.
In a situation where businesses that are important to the entire economy are at risk of running out of money, it is important that the state can help, according to Hassler.
If it works as intended, the state does not have to lose any money, he underlines.
- In much the same way that you didn't lose any money when you went in and gave liquidity support to banks during the financial crisis.
"Risks of increasing risk propensity"
Lars Jonung, professor of economics at Lund University, is all the more skeptical about the proposal.
He believes that the liquidity support risks leading to the energy companies becoming more risk-prone.
- My proposal is that the energy companies that trade on the futures market should take the risks themselves.
It will make them less risk-averse.
If you back up their financial position with more financial muscle, there is a risk that they will make decisions that will eventually have to be paid for by the taxpayers, he tells Sweden's Radio Ekot in a live broadcast.
Hear Professor John Hassler explain more about how liquidity guarantees work in the clip above.