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1030 XIV. CREDIT AND INSURANCE ESTABLISHMENTS OF SWEDEN.
The business of these banks is liable to the following restridions.
Such a bank is not permitted to own any other real estate than that
used for the business of the bank, and not possess or lend on its
own share certificates or those of other conjointly responsible banking
companies, neither carry on business with anything but gold, bills of
exchange, or papers bearing interest.
Out of the 27 private banks existing in 1897, at present only 22
remain conjointly responsible.
Joint-stock Banks.
Through the law of October 6, 1848, the founding of limited liability
banks was permitted, i. e., banks with limited responsibility for the
shareholders and without a license to issue notes. The first limited bank
was founded in 1863. By act of November 19, 1886, new conditions
were fixed for establishing such limited banks. This act, which did
not touch upon the 15 already existing limited banks, has been in force
until the end of 1903 and has given the fundamental principles for
the 31 limited banks founded during 1886/1903. The chief points of
this act were as follows:
For the founding of such a bank a Government concession was
required and this was not granted for a longer period than 20 years.
The shareholders must be Swedish citizens, their number being at least
20. The capital stock should, as a rule, be at least 1 million kronor;
for banks with a small and locally limited business the capital stock
was permitted to be less, but not below 200,000 kronor. Fifteen per
cent of the yearly profit should be set aside for the purpose of a reserve
fund until this had amounted to half of the capital stock. The share
certificates should be issued to a certain person.
The business was liable to the following restrictions. Such a bank
was not permitted to own any other real estate than that needed for
the business of the bank nor to possess or borrow upon its own shares,
neither to carry on business with anything but gold, silver, bills of
exchange, or papers bearing interest (thus not with shares).
The law now existing with regard to limited banking companies is
of September 18, 1903. In the afore-mentioned details it differs only
so far from the previous law that their license is limited to 10 years,
and that they have no right to carry on business with anything but
gold, home and foreign bills of exchange, and papers bearing interest,
thus not with silver.
After the proclamation of this act one more bank has been founded.
The total number of limited liability banks now existing amounts
to 49.
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