Sveriges Riksbank

Sveriges Riksbank, or simply the Riksbank, is the central bank of Sweden. Founded in 1668, it is
the world's oldest surviving central bank, and the third oldest bank in continuous operation.[3][4]
Until the 20th century, it was also the only state-owned central bank outside of the Russian
Empire.[5]: 14

Sweden bonds
20 year
10 year
5 year
2 year
6 month
3 month
1 month

Etymology
The first part of the word riksbank, riks, stems from the Swedish word rike, which means realm,
kingdom, empire or nation in English. A literal English translation of the bank's name could thus
be Sweden's Realm's Bank. The bank, however,
doesn't translate its name to English but uses
its Swedish name the Riksbank also in its Sveriges Riksbank
English communications.

History
The Riksbank began operations in 1668.
Previously, Sweden was served by the
Stockholms Banco (also known as the Bank
of Palmstruch), founded by Johan Palmstruch
in 1656. Although the bank was private, it was
the king who chose its management: in a
letter to Palmstruch, he gave permission to its
operations according to stated regulations.
But Stockholms Banco collapsed as a result
of the issuing of too many notes without the
necessary collateral. Palmstruch, who was
considered responsible for the bank's losses,
was condemned to death, but later received
clemency. On 17 September 1668, the
privilege of Palmstruch to operate a bank was
transferred to the Riksens Ständers Bank
(lit. 'Bank of the Estates of the Realm') and
was run under the auspices of the parliament
of the day. Due to the failure of Stockholm Headquarters
Banco, the new bank was managed under the
direct control of the Riksdag of the Estates to
prevent the interference from the king. When a Headquarters Brunke
new Riksdag was instituted in 1866, the name
of the bank was changed to Sveriges 11
Riksbank.
103 37
Having learned the lesson of the Stockholms
Banco experience, the Riksbank was not Stockh
permitted to issue bank-notes. Nevertheless,
in 1701, permission was granted to issue so Swede
called "credit-notes". Some time in the middle
of the 18th century, counterfeit notes began
Established 17 Septe
appearing, which caused serious problems. To
prevent forgeries, it was decided that the
1668
Riksbank should produce its own paper for
bank-notes and a paper-mill, Tumba Bruk, was
founded in Tumba, on the outskirts of Ownership 100% stat
Stockholm.
ownershi
A few years later, the first commercial banks
were founded and these were also allowed to
issue bank-notes. The bank-notes represented Governor Erik
a claim to the bank without interest paid, and
thus became a considerable source of income Thedéen
for banks. Nonetheless, security in the form of
a deposit at the Riksbank was required to
cover the value of all notes issued.
Central bank of Swed

Currency Swedish
krona
SEK (ISO
A mid-19th century banknote for 32
Skillingar Banco (1843) 4217)
During the 19th century, the Riksbank
maintained a dominant position as a credit Reserves 49 830
institution and issuer of bank-notes. The bank
also managed national trade transactions as million
well as continuing to provide credit to the
general public. The first branch-office was USD[1]
opened in 1824, later followed with subsidiary
branches opening in each county (län). The Reserve None
present operational activities as a central
bank differ from those during the 19th requirements
century. For example, no interest-rate-related

Bank rate 0.75[2]

activities were conducted.

The position of the Riksbank as a central bank

dates back to 1897, when the first Riksbank
Act was accepted concurrently with a law
Interest 0.65[2]
giving the Riksbank the exclusive right to
issue bank-notes. This copyright concluded its
on
role and importance regarding monetary
policy in a modern sense, as the exclusive
reserves
right to issue notes is a condition when
conducting monetary policy and defending the Interest not
value of a currency. Behind the decision were
repeated demands that the private banks paid on applicable
should cease to issue notes as it was
considered that the ensuing profits should
excess (no reserve
befall the general public.

The Swedish currency was backed by gold reserves? requireme

and the paper-certificates could be exchanged
for gold coins until 1931, when a specialized
Preceded Riksens
temporary law freed the bank from this
obligation. This law was renewed every year
by Ständers
until the new constitution was ratified in 1975
which split the bank from the government into
Bank
a stand-alone organization not obligated to
exchange notes for gold.[6]
(1668)
In November 1992, the fixed exchange rate
regime of the Swedish Krona collapsed. A few Stockholm
months later, in January 1993, the Governing
Board of the Riksbank developed a new
monetary policy regime based on a floating
exchange rate and an inflation target. These
policies were extensively influenced by Banco
assistance from the Bank of Canada, which
had extensive previous experience controlling (1657)
inflation, while being a similar small open
economy, heavily subject to foreign exchange
Website www
rate swings.[7]

From 1991 to 1993, Sweden experienced its .riksbank

most severe recession since the 1930s
termed the "Swedish banking rescue". It .se (htt
forced inflation down to around 2%, and
inflation continued to be low during the p://www.
subsequent years of strong growth in the late
1990s. riksbank.
During the 2000s, the operations and se/)
administrative departments were downsized
on behalf of the policy departments Financial
Stability Department and Monetary Policy
Department. A direct consequence of the changing times was that the Riksbank closed down all
its branches in Sweden and outsourced the handling of coins and bills to a private company.
Today the policy departments are the core of the central bank and they employ about half of the
bank's 350 full-time posts.

Motto
The motto of the Bank is Hinc robur et securitas, which is Latin for "Herefore strength and
security" ("Härav styrka och säkerhet").
Sveriges Riksbank Prize in
Economic Sciences in
Memory of Alfred Nobel
Following its third centennial in 1968, the bank instituted the annual Sveriges Riksbank Prize in
Economic Sciences in Memory of Alfred Nobel, which is awarded with the Nobel Prizes at the
Prize Award Ceremony in Stockholm, on 10 December, the anniversary of Alfred Nobel's death.

Innovative monetary policy

initiatives
The Riksbank has a reputation for innovation among central banks due to implementing policies
such as:

Negative interest rates

On 2 July 2009, Sweden's Riksbank was the first central bank in the world to implement a
negative interest rate, when it lowered its repo rate (the rate at which a central bank lends short-
term money to commercial banks against securities) to 0.25%. This caused its linked overnight
deposit rate (the interest commercial banks get for depositing money with the central bank
overnight) to be pushed down to −0.25%, while the overnight lending rate (the interest a central
bank charges commercial banks for overnight lending) was lowered to 0.75%.[8] This was done
to counter economic slowdown due to the financial crises of 2008. The bank's Deputy Governor
Lars E. O. Svensson stated that he had preferred a cut of the repo rate to 0.00%, as this would
"entail a better balanced monetary policy, with lower unemployment and higher resource
utilisation without inflation deviating too far from the target."[8] The Swedish move to a negative
discount rate was followed with great interest by central banks around the world.[9]

On 28 October 2014, the Riksbank cut its repo rate to 0.00%, as Deputy Governor Svensson
advocated in July 2009, pushing the linked deposit rate to −0.75%, while the lending rate
remained at 0.75%.[10][11]

On 12 February 2015, the bank again lowered the repo rate to −0.10%. The Riksbank announced
at the same time that it would buy government bonds for SEK 30 billion, and that more measures
would likely follow.[12][13] The deposit rate was lowered to −0.85%, and the lending rate to
0.65%.[14]

On 18 March 2015, the Riksbank cut the repo rate even further, to −0.25%.[15] The bank
announced at the same time that it was buying government bonds worth SEK 30 billion (US$3.4
billion, €3.2 billion) to prevent an appreciating krona from hindering an uptick in inflation.[16]
Inflation has been close to zero in Sweden since late 2012 and in February it was at 0.1%, far
below the target of 2.0%, and the purpose of these moves was to stimulate inflation.[16] The bank
announced that it intends to keep the rate at −0.25%. "at least until the second half of 2016."[16]
The deposit rate was as a consequence lowered to −1.00% and the lending rate to 0.50%.[14]

The Riksbank has consequently lowered the rate two additional times, first on 8 July 2015 down
0.10 percentage points to −0.35 and most recently, on 17 February 2016 it was down another
0.15 points to −0.50.[17] The accompanying deposit and lending rates now lies at −1.25 and 0.25,
respectively.[14][18]

E-krona
Facing a natural drop in the use of cash by the Swedish population, the Riksbank is pioneering
the idea of introducing a central bank digital currency, the e-krona.[19] Such currency would have
the same properties as cash, but in a digital form. In November 2016, the Bank announced an
ambitious research programme[20] in order to help the bank decide whether it should start
issuing e-krona. The Bank released its first interim report in September 2017 which outlined that
"no major obstacles to the introduction of an e-krona have been identified".[21]

Following the announcement, scammers claiming to be selling Riksbank e-kronas have been
targeting some consumers via telephone calls, even though as of the end of 2021 Riksbank has
not decided yet whether it will issue an e-krona.[22]

Other Swedish banks

Nordea, Swedbank, Skandia, Länsförsäkringar, Danske Bank, Handelsbanken, SEB, Volvofinans
Bank, Färs & Frosta Sparbank, Ikano Bank, HQ Bank, Carnegie Investment Bank ICA Banken,
Avanza, Resurs Bank.

First Deputies

Karl Langenskiöld, 1901–1912

Victor Moll, 1912–1929
Ivar Rooth, 1929
Kerstin af Jochnick, 2012-2019
Cecilia Skingsley, 2019-2022
 Anna Breman, 2022-

Governors

Ivar Rooth, 1929–1948

Klas Böök, 1948–1951
Mats Lemne, 1951–1955
Per Åsbrink, 1955–1973
Krister Wickman, 1973–1976
Carl Henrik Nordlander, 1976–1979
Lars Wohlin, 1979–1982
Bengt Dennis, 1982–1993
Urban Bäckström, 1993 – 31 December
2002
 Lars Heikensten, 1 January 2003 – 31
December 2005
Stefan Ingves, 1 January 2006–31
December 2022
Erik Thedéen, 1 January 2023–

See also

Economy of Sweden
Monetary policy of Sweden
Swedish krona
Riksdaler
Scandinavian Monetary Union
Sweden and the euro
Swedish National Debt Office
 Södra Bankohuset
List of central banks

References

1. Weidner, Jan (2017). "The Organisation and

Structure of Central Banks" (https://d-nb.inf
o/1138787981/34) (PDF). Katalog der
Deutschen Nationalbibliothek.
2. "Policy rate, deposit and lending rate" (http
s://www.riksbank.se/en-gb/statistics/searc
h-interest--exchange-rates/policy-rate-depo
sit-and-lending-rate/) . Sveriges Riksbank. 6
July 2022. Archived (https://web.archive.or
g/web/20220905140429/https://www.riksb
ank.se/en-gb/statistics/search-interest--exc
hange-rates/policy-rate-deposit-and-lending
-rate/) from the original on 5 September
2022. Retrieved 5 September 2022.
3. Crowe, Christopher; Meade, Ellen E. (Fall
2007). "The Evolution of Central Bank
Governance around the World" (https://ww
w.aeaweb.org/articles/pdf/doi/10.1257/je
p.21.4.69) . Journal of Economic
Perspectives. 21 (4): 69–90.
doi:10.1257/jep.21.4.69 (https://doi.org/10.
1257%2Fjep.21.4.69) . JSTOR 30033752 (h
ttps://www.jstor.org/stable/30033752) .
S2CID 154928527 (https://api.semanticsch
olar.org/CorpusID:154928527) .
4. "History" (https://web.archive.org/web/200
80504165055/http://www.riksbank.com/te
mplates/Page.aspx?id=9159) . Sveriges
Riksbank. 23 March 2009. Archived from
the original (http://www.riksbank.com/temp
lates/Page.aspx?id=9159) on 4 May 2008.
Retrieved 2 September 2010.

5. George Garvy (1977). "The Origins and

Evolution of the Soviet Banking System: An
Historical Perspective" (https://www.nber.or
g/system/files/chapters/c4154/c4154.pd
f) (PDF). Money, Financial Flows, and
Credit in the Soviet Union. National Bureau
of Economic Research.
6. "Frequently asked questions" (https://web.a
rchive.org/web/20101009074733/http://w
ww.riksbank.com/templates/Page.aspx?id
=10892) . Sveriges Riksbank. 19 March
2009. Archived from the original (http://ww
w.riksbank.com/templates/Page.aspx?id=1
0892) on 9 October 2010. Retrieved
2 September 2010.

7. "Inflation Targeting—The Swedish

Experience" (https://web.archive.org/web/2
0070615135301/http://www.bankofcanad
a.ca/en/conference/con97/cn97-16.pdf)
(PDF). Bank of Canada. Archived from the
original (http://www.bankofcanada.ca/en/c
onference/con97/cn97-16.pdf) (PDF) on
15 June 2007. Retrieved 26 May 2007.
 8. "Repo rate cut to 0.25 per cent" (http://archi
ve.riksbank.se/Pagefolders/41535/nr67e.p
df) (PDF) (Press release). Sveriges
Riksbank. 2 July 2009. Retrieved 1 August
2018.

9. Ward, Andrew; Oakley, David (27 August

2009). "Bankers watch as Sweden goes
negative" (https://www.ft.com/content/5d3
f0692-9334-11de-b146-00144feabdc0) .
Financial Times. Retrieved 1 August 2018.

10. "Repo rate cut to zero per cent" (http://archi

ve.riksbank.se/en/Web-archive/Published/
Press-Releases/2014/Repo-rate-cut-to-zero
-per-cent/index.html) (Press release).
Sveriges Riksbank. 28 October 2014.
Retrieved 1 August 2018.
11. Khan, Mehreen (28 October 2014). "How
low can you go? Sweden cuts interest rates
to zero" (https://www.telegraph.co.uk/finan
ce/11191997/How-low-can-you-go-Sweden
-cuts-interest-rates-to-zero.html) . The Daily
Telegraph. London. Retrieved 1 August
2018.

12. "Ingves and Jochnick in hearing on

monetary policy: We are determined to
safeguard the inflation target" (http://archiv
e.riksbank.se/en/Web-archive/Published/N
otices/2015/Ingves-and-Jochnick-in-hearin
g-on-monetary-policy-We-are-determined-to
-safeguard-the-inflation-target/index.html) .
Sveriges Riksbank. 5 March 2015.
13. Carlstrom, Johan; Billner, Amanda (12
February 2015). "Riksbank Cuts Key Rate to
Negative" (https://www.bloomberg.com/ne
ws/articles/2015-02-12/riksbank-cuts-key-r
ate-to-negative-as-qe-tested) . Bloomberg
Businessweek.

14. Repo rate table 2015 (http://www.riksbank.

se/en/Interest-and-exchange-rates/Repo-ra
te-table/2015/) Sveriges Riksbank Linked
2015-04-10

15. Jolly, David (18 March 2015). "Sweden Cuts

Key Interest Rate to Minus 0.25%" (https://
www.nytimes.com/2015/03/19/business/i
nternational/sweden-interest-rate-negative.
html) . The New York Times. Retrieved
1 August 2018.
16. Sullivan, Tom (18 March 2015). "Swedish
central bank cuts key rate further below
zero" (https://news.yahoo.com/swedish-ce
ntral-bank-cuts-key-rate-further-below-1646
25984.html) . Yahoo! News.

17. "Repo rate cut to −0.50 per cent" (http://arc

hive.riksbank.se/en/Web-archive/Publishe
d/Press-Releases/2016/Repo-rate-cut-to-05
0-per-cent/index.html) (Press release).
Sveriges Riksbank. 11 February 2016.
18. Repo rate table 2016 (http://www.riksbank.
se/en/Interest-and-exchange-rates/Repo-ra
te-table/2016/) Sveriges Riksbank: Linked
2016-07-15 Archived (https://web.archive.o
rg/web/20160822082728/http://www.riksb
ank.se/en/Interest-and-exchange-rates/Rep
o-rate-table/2016/) 22 August 2016 at the
Wayback Machine

19. "Sweden could become the first major

country to issue a national digital currency"
(http://uk.businessinsider.com/swedish-ce
ntral-bank-considers-digital-national-curren
cy-ekrona-2016-11?r=US&IR=T) . Business
Insider. 16 November 2016. Retrieved
1 August 2018.
20. Skingsley, Cecelia (16 November 2016).
"Skingsley: Should the Riksbank issue e-
krona?" (https://web.archive.org/web/2016
1221093204/http://www.riksbank.se/en/Pr
ess-and-published/Speeches/2016/Skingsl
ey-Should-the-Riksbank-issue-e-krona/) .
Sveriges Riksbank. Archived from the
original (http://www.riksbank.se/en/Press-a
nd-published/Speeches/2016/Skingsley-Sh
ould-the-Riksbank-issue-e-krona/) on 21
December 2016. Retrieved 1 August 2018.

21. "The E-krona Project's First Interim Report"

(https://www.riksbank.se/en-gb/financial-st
ability/payments/e-krona/the-e-krona-proje
cts-first-interim-report/) . Sveriges
Riksbank. 21 May 2018. Retrieved
10 November 2017.
22. False information regarding the sale of e-
kronas (https://www.riksbank.se/en-gb/pay
ments--cash/e-krona/false-information-reg
arding-the-sale-of-e-kronas/)

External links

Official website of Wikime

dia
Sveriges Riksbank (http
Commo
s://www.riksbank.se/en ns has
media
-gb) (in English)
related
Historical Monetary to
Sveriges
Statistics of Sweden Riksban
1668–2008 published k.

by the Riksbank (https://web.archive.or

g/web/20080504165035/http://www.rik
 sbank.com/templates/Page.aspx?id=27
394)

Retrieved from
"https://en.wikipedia.org/w/index.php?
title=Sveriges_Riksbank&oldid=1214536833"

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