sou 1999 1 - Regeringen

40 Summary SOU 1999:1
actually are pledged as security. There is no appreciable difference related
to the different sizes of municipalities.
Pursuant to Chapter 2, section 13 of the Banking Operations Act (SFS
1987:617), banks may lend money only where the borrower is believed to
possess the ability to repay the loan. In addition, sufficient security must be
provided unless special cause exists. The Committee interviewed bank representatives
in Sweden, Denmark, and Finland.
The Swedish bank representatives stated that the business mortgage, despite
the fact that the underlying property has a limited borrowing value, is
of significance in conjunction with borrowing by some companies. It can be
noted in this context that claims secured by business mortgage receive an
average dividend of approximately 45% in bankruptcies. It has been
claimed that the abolition of business mortgages would result in certain
loans no longer being available and other types of security would be demanded
to a greater extent.
In Denmark, there are no floating charges. Suppliers have greater possibilities
than in Sweden to obtain an exclusion of stock in trade from the
assets of the estate in bankruptcy, which may be resold prior to payment
through what is known as a credit consignment. The Danish Finance Council
(which corresponds to the Swedish Banking Association) has recently
requested legislation creating floating charges in Denmark as well. In its
petition to the Government, it was emphasised that the purpose is to obtain
access to simple and inexpensive security, while it cannot be expected that
the volume of credit will increase or that interest rates will be lowered.
From our interviews, it was also apparent that the debtors were somewhat
opposed providing other security which would decrease their ability to deal
with their assets (creation of a charge over stock in trade) or which might
give the debtor a bad reputation (factoring).
In Finland, a business can grant a floating charge by way of a business
mortgage over 50% of its property. This percentage was selected in conjunction
with the abolition of certain superior rights of priority (for wage
and tax claims). Depending on the focus of the banks, they stated in our
interview that the business mortgage was good supplemental security or,
respectively, that the total abolition thereof would not make any difference.
No complaints were relayed regarding the impossibility to use all of a debtors
property as the basis for a floating charge.
In Norway, there is an equivalent to the Swedish business mortgage
through three different registered charges, namely over personal property,
stock in trade, and book debts (factoring charges). In 1993, a committee
proposed (NOU 1993:16) that the registered charge over stock in trade and
book debts be abolished; the borrowing value was deemed to be too low
(25-50%). Instead, it was believed that the banks were combing enterprises