There is, of course, a reason why I am standing here talking about historical events. But, before I get to this reason, I would like to say a few words about the money we use today. Central bank money and commercial bank money Today, we have three kinds of money. The first kind is the one I have talked about the most today, banknotes and coins. These are a form of central bank money, that is, money issued by the central bank. As I mentioned earlier, the special thing about central bank money is that it has no nominal credit risk, as it stands for a claim on the central bank, which cannot go bankrupt. Cash is also the form of central bank money that can be held by the general public. The second sort of money is also central bank  3 [10]  money, but in electronic form. This is the money that is held in accounts with the Riksbank and it can only be held by those who are allowed to have accounts in the Riksbank, which currently means credit institutions, securities companies, clearing organisations and the Swedish National Debt Office. It is electronic central bank money that the banks use when they are making large payments to one another. This is done through a payment system called RIX. Most of the electronic payments made in Sweden, whether they are made by direct debit, credit transfer or card, pass through RIX at some point. The third kind of money is commercial bank money.
Money is then unable to fulfil its three functions and we are, in a way, back in the barter economy. 2 [10]  Money assumes trust Until fairly recently, the trust problem was resolved in two ways. The oldest method is by minting coins in precious metals. The coins then have a value in themselves. In Sweden, the value of metal appears to have been on average 85% of the coin's nominal value until around the 17th century. Trust in coins was also increased when the king, not only in Sweden, but in most countries, promised to accept his own coins as payment for tax collection and so on. In this way, the holder of a coin knew that the money could be used in the future at a particular value and that in a worst case scenario, if the king broke his promise, the coins had a metal value. If we look at the 17th century, an important financial innovation took place here in Stockholm: the first modern banknote was produced. The banknote was made of paper and thus had not metal value. On the other hand, the issuing bank, in this case Stockholms Banco, guaranteed that the holder would always be able to redeem the paper for precious metals. The trust was thus shifted from the precious metals in the coin to the party storing the precious metals. Banknotes assume that there is a broad trust in the issuing bank. The same applies of course to the money we have in our bank accounts.