Extra meeting of the Riksdag Committee on Finance16 August 2011 Stefan Ingves
Rising long interest rates for countries with sovereign debt problems Ten-year government bond rates, per cent.
Weak public finances a problem Sovereign debt as percentage of GDP Source: IMF WEO April 2011
Some international events during the summer • EMU: EFSF extended and empowered to buy government bonds on secondary market • EMU: Cut interest rates on official loans to countries with support programmes • EMU: Incentives for holders of Greek government bonds to exchange them for new ones with longer maturities • EMU: ECB begins to buy Italian and Spanish government bonds • EMU: New savings measures announced in Italy and Spain • USA: Public debt ceiling raised. Savings of USD 2400 billion over the coming 10 years. • USA: Standard & Poor downgraded US credit rating
Large dependence on foreign marked fundingThe major Swedish banks’ market funding via Swedish parent and subsidiary companies, SEK billion Sources: Statistics Sweden and the Riksbank
Expected slowdown in GDP growth Quarterly changed calculated as an annual change Sources: Statistics Sweden and the Riksbank
The main task for monetary policy is the inflation targetForecasts from the July Monetary Policy Report Annual percentage change Sources: Statistics Sweden and the Riksbank
Summary • Swedish banks are well capitalised, and at present have no funding problems • The Riksbank is ready and able to take action if required • Statistics received so far are roughly in line with the most recent assessments of the Swedish economy, but prospects abroad look weaker • The Riksbank will publish a new interest rate decision and new assessments on 7 September