Kommuninvest Investor Presentation
Kommuninvest Investor presentation
Strong institutional framework
According to the Swedish Bankruptcy Act a local government cannot be declared bankrupt since they do not fulfil
the criteria of being insolvent. This is due to the fact that the local governments have the constitutional right to levy
taxes. The Swedish Court has stated that the local governments in Sweden are not covered by the Bankruptcy Act.
(RH 1996:75) This view is supported by the Swedish legal doctrine.
Requirement for sound
financial management
Local governments must work
according to a sound financial
management.
Law:
"Kommunallagen chap. 8 §1-2
(1991:900)"
Balanced budget
requirement
Annual local government budgets
should normally be in balance,
imbalances must be restored within
3 years.
Law:
"Kommunallagen chap. 8 §4-5
(1991:900)"
Local government financing
principle
If the government alters the tasks
of local governments, the
government must also neutralize
their financial effect.
Approved by the government and in
force since 1993.
Financial equalization
Imbalances between local
governments are equalized
annually through income and cost
equalization schemes.
Law: "Lagen (2004:773)
om kommunalekonomisk utjämning"
=
13View entire presentation