Today we are once again in a situation where such bank support authorities are being established in many parts of the world, including Sweden. We are also facing a period of poorer economic activity. But this time the situation is very different for Sweden. Experience and measures have given resilience The anxiety that has had a stranglehold on the financial markets since the end of September comes from outside this time, not from problems in the Swedish bank sector. Swedish banks have on the whole shown much more responsible credit granting, both compared with the years following credit deregulation and compared with parts of the US mortgage market. The banks have good capital buffers and can manage substantial loan losses, even if they are nevertheless affected by the general mood of distrust on the market. We are also much better equipped in many ways to meet an economic downturn than we were at the beginning of the 1990s. I am thinking here of the effects of the changeover in monetary and fiscal policy after the crisis, and the fact that we now have sound public finances and a substantial surplus on the current account. Although a small, open economy like Sweden’s is never immune to what is happening in the world economy, and particularly to an international financial crisis, we learnt a lot from the difficult years in the 1990s. This applies to the banks as well as to the supervisory authorities and the political system.
BIS Review 138/2008  05  06  07  08  09  10  11  12  Sources: Intercontinental Exchange and the Riksbank  15  Falling commodity prices USD, index (2000 = 100)  350  350 Food M etals Other agricultural products Total  300  300  250  250  200  200  150  150  100  100 04  05  06  07  08  Source: The Economist  Weaker krona Trade-weighted exchange rate (TCW), index, 18 November 1992 = 100  138  138 TCW-index  136  136 TCW-forecast M PR 2008:3 TCW-forecast M PR 2008:3  134 132  134 132  130  130  128  128  126  126  124  124  122  122  120  120 04  05  06  07  08  09  10  Note. Broken lines refer to the Riksbank’s forecasts (quarterly data). 16  11  12  Source: The Riksbank  BIS Review 138/2008  Lower growth in the world and in Sweden Annual percentage change, calendar-adjusted data 6  6  Sweden World  5  5  4  4  3  3  2  2  1  1  0  0  -1  -1  -2  -2 -3  -3 1980  1985  1990  1995  2000  2005  2010  Note.