When the interbank rates are to be determined, the panel banks report submissions. If there are no actual transactions in the interbank market, the submissions are instead based on the banks' judgements of what the interest rate for an interbank loan would be. 2 [8]  Over time, the number of transactions on which to base the bids has declined, as interbank loans are not currently the banks’ primary source of funding. During the period January-August, there was not a single unsecured transaction at the maturity tomorrow-next in Swedish kronor between STIBOR panel banks!1 So during that period no such transactions were carried out which the daily values of STIBOR’s shortest maturity are to reflect. The submissions are therefore now based almost exclusively on the banks' judgements. And this means that the reference rate is becoming increasingly vulnerable. Interbank markets have also become less important in other countries following the global financial crisis, and therefore international interbank rates are also based to a lesser and lesser extent on actual transactions. As a result, global confidence in these interest rates has decreased rapidly. One event that further weakened confidence in interbank rates is the so-called LIBOR scandal in 2012, when it was discovered that several panel banks had manipulated submissions for their own gain, not least during the global financial crisis in 2007-2008. It was simply a question of reporting false submissions for the calculation of LIBOR with a view to benefiting their own business transactions.
Of relevance is that excessive risk-taking behaviours featured prominently as a key factor contributing to the Crisis. In addition, what makes the Global Financial Crisis different is the extent of the economic and financial inter-linkages within and across borders, which explains the far-reaching impact of the crisis. While the greater interconnectedness of economies and financial systems has brought about opportunities, it has also resulted in greater risks. The Global Financial Crisis has resulted in the re-assessment of how policymakers view the achievement of macroeconomic and financial stability. There is a growing recognition that emerging risks to macroeconomic and financial stability have to be identified and managed in a more holistic and effective manner. As the economy and financial system grow in complexity, policymakers have to strengthen the understanding of the macroeconomic and financial inter-linkages in order to be able to effectively assess the implications of any potential risk on the economy. Before the Global Financial Crisis, the predominant view was that unfettered markets, selfcorrections and minimal interventions would deliver the best economic outcomes. However, recent experiences have shown that policy interventions to correct market misalignments after a crisis may prove too late as the aftermath could be extremely costly. This, therefore, call for policies to be pre-emptive rather than reactive. For policymakers, the aim is to preserve macroeconomic and financial stability, and build the country’s resilience to shocks. Macroeconomics stability is a very important prerequisite for businesses and individuals to undertake economic activities.