He told City's website: "I think it's on going and I know the Club has spoken to his agent and I have spoken to his agent.
And when Eriksson arrived at City he found a ready-made captain in Dunne and Sven praised the Irishman's credentials: "I think a captain doesn't need to speak very much. It's important that the players look up to him and listen when he speaks and I think Richard Dunne is one of those players. When he has something to say no players argue with that - that's leadership."
The Manager went even further by underlining: "A captain is important. If I have any doubts and want to speak to anyone, I normally take the captain and ask his opinion, because he speaks for the players.
"As a coach you have a little bit more contact with the captain than the other players. If you take Richard Dunne, he sets a good example in the dressing room, the training field and the pitch on match days. He always gives everything, even today in training."