Liquidity can be supplied generally to the market or in the form of specific assistance for individual financial institutions. The Riksbank has used both of these alternatives. The general liquidity assistance has been designed so that the Riksbank has supplied the banks with loans in kronor and dollars at longer maturities than the market has been able to offer. In total this lending has amounted to over SEK 450 billion. Lending in kronor has increased by more than SEK 250 billion and lending in dollars by almost SEK 200 billion. BIS Review 7/2009  5  This means that the Riksbank's balance sheet for the second half of 2008 has increased from SEK 200 billion at the end of June to SEK 700 billion at the turn of the year. The loans from the Riksbank together with Swedbank's borrowing under the government's guarantee programme mean that the State provided or guaranteed more or less all of the banking sector's borrowing in the last few months of 2008. The Riksbank has also set up a temporary credit facility based on commercial papers in order to improve the supply of credit for non-financial companies. These companies can fund their operations by issuing commercial papers and selling them to the banks. The commercial papers can then be used by the banks as security for loans from the Riksbank. However, the scope of these activities has been fairly limited.
The Icelandic bank Kaupthing experienced problems in Iceland and the Riksbank granted the Swedish subsidiary Kaupthing Bank Sverige AB liquidity assistance in October 2008. Carnegie Investment Bank AB also received liquidity assistance in October when it had problems finding funding. Given the financial market turbulence, the Riksbank’s assessment was that a suspension of payments by one of the banks could entail a risk of a serious disruption in the financial system and could undermine confidence in the payment system. Finansinspektionen (the Swedish financial supervisory authority) later revoked Carnegie’s licence to conduct banking activities. The Swedish National Debt Office took control over Carnegie and Finansinspektionen therefore changed its decision regarding the revocation of the licence to instead giving the bank a warning. The Riksbank’s liquidity assistance has been repaid. The Riksbank has also participated in the international cooperation to strengthen financial stability in Sweden's neighbouring countries. In May 2008, the Riksbank and the central banks in Denmark and Norway entered into a euro/Icelandic kronor swap agreement with the central bank of Iceland. The aim of this swap agreement is to support the Icelandic central bank in its efforts to safeguard macroeconomic and financial stability. Sweden's part of the swap agreement amounts to EUR 500 million. The agreement was extended in December after the IMF had drawn up a programme for financial assistance for Iceland. Latvia has negotiated a support package with the IMF and the EU which will make it possible for the country to retain its fixed exchange rate against the euro.