Most bank lending to both households and companies takes place at variable interest rates, and in the bond market, rates are often variable.13 Household and corporate consumption and investment decisions should therefore be primarily affected by short-term market interest rates and expectations of future short-term interest rates, while the acquisition of assets that push down the term premium should be less important. Despite the very short interest-rate fixation periods on household and corporate loans, the Riksbank's purchases could have an effect if they lower bank funding costs. An important source of funding for the banks is the market for covered bonds. Banks issue such bonds, often with a maturity of 2-5 years, mainly to finance household mortgage loans. Thus, even though the mortgage loans usually have a short interest-rate fixation period, lower premiums (i.e. lower interest rates and higher prices) on covered bonds could push down the bank funding costs and thus lead to lower lending rates. However, as I noted above, the premiums on covered bonds do not appear to have been affected when the Riksbank bought government bonds during 2015-2019. This argument becomes even clearer when one looks at how the banks' actual lending rates to households and companies developed during the period. If the acquisition of assets had had an important effect on the interest rates that households and companies encounter, we should have seen that lending rates to these fell more than the policy rate was reduced in 2015-2019.
If the Riksbank has not succeeded in building confidence, it would be much more difficult to conduct monetary policy today. I suspect that today's high inflation would have more easily become entrenched and been able to start a price-wage spiral. In that case, the Riksbank would have had to raise the policy rate even more this year, which would have resulted in a greater slowdown in the economy. The purchases in phase 1 may thus have reduced the risk of such a scenario. Is the Riksbank’s financial independence threatened? The valuation losses in Table 1 cannot be directly transferred to an annual result.36 However, since the value of the Riksbank's assets has fallen rapidly, the Riksbank will most likely report a major financial loss this year37 It is not unlikely that the Riksbank's reported equity in the next financial statements will be negative, at least if one disregards unrealised gains in the revaluation accounts for gold and foreign currencies (see Table 4) The fact that capital is shrinking or even becoming negative need not be a problem for a central bank. Some central banks, such as the Federal Reserve and the Bank of England, hand out all of the surplus to their principal and therefore have no capital except a small base fund and any risk provisions. And some central  35 The calculation is based on an alternative where the policy rate is the same.