The participants are evaluated to a greater extent against other market participants. This increases the incentives to do the same as everyone else, so that one at least does not report poorer results than the average. Information on other participants’ behaviour has also become more easily accessible, which can further increase the risk of herd behaviour. This increases the risks of liquidity problems, particularly in the event of financial crises, when an increasing number want to sell similar assets at the same time. Moreover, market participants’ tendency to take risks has probably increased as they are evaluated in an increasingly short-term perspective. 31 It has become simpler to choose investments in securities with a specific liquidity, maturity and risk through so-called securitisation. What this means is that credit institutions, often banks, with a portfolio of for instance mortgages, sells this portfolio as a package to another credit institution. The buyer then converts the package into new securities with specific risks and interest terms – this is what comprises the actual securitisation – and sells the package on to new investors. These new packages are attractive investment objects as they often provide a good return in relation to the risk. Securitisation can increase the efficiency of the financial system, but it also entails risks, which was showed by the global financial crisis 2008-2009. One reason for the risks possibly increasing is if securitisation affects the banks’ capital requirements.
I would like to discuss the changes in the financial environment and how they affect our different areas of operation, but before I do so I shall talk about the Riksbank's main role in the financial system, namely to provide the Swedish economy with safe money that is easy and efficient to use. The Riksbank provides the economy with money that safe and simple to use Money is needed so that we can buy and sell goods and services. If we are to have confidence in money, and want to use it, it needs to be both safe and easy to use. This requires in turn financial stability, price stability and smoothly-functioning payment systems. Let me describe how the Riksbank tries to create the right conditions. If we start with money being safe, this means that one can rely on money representing a particular value in goods and services, and that it will retain this value until the day one wants to redeem it for goods and services. The pieces of paper that we issue have no value in themselves, but function as a form of evidence that someone has produced something of value. 2 In the academic literature there is, for instance, a branch known as ‘monetary economics’ or in its modern form, ‘new monetarist economics’ 3, which looks into why money arises and under what conditions it retains its value.