I have never previously experienced such rapid change, despite this being the third major economic crisis in Sweden that I have been involved in. The Riksbank is tracking indicators and also interviewing more companies than normal in order to get an idea of how the situation is changing from day to day and from week to week. What is beyond a shadow of a doubt, however, is that many in society are struggling right now. My thoughts are obviously with all the country’s fantastic health workers who are on the front line. On a personal level, many are also struggling 1  https://www.riksbank.se/en-gb/press-and-published/notices-and-press-releases/press-releases/2020/ingvesand-breman-at-riksdag-committee-on-finance-the-riksbank-is-prepared-to-act/ 2 https://www.riksbank.se/en-gb/press-and-published/notices-and-press-releases/press-releases/2020/the-riksbanks-business-surveyeverything-has-changed-in-two-weeks/  1 [5]  with uncertainty and anxiety about future developments. Not only about the spread of the virus and concern for the health of loved ones, but also worrying about possible unemployment and losing their life’s work when parts of the economy close down. People suffer in economic crises and when bankruptcies and unemployment increase sharply, there will be psychosocial consequences. Make no mistake. And it takes time for the memories to fade. The underlying causes of a crisis can differ, but regardless of them, there will almost always be problems with credit supply in the economy – the financial lifeblood grinds to a halt. If demand for company products and services falls sharply, revenues decrease. Companies then find it more difficult to pay wages, rents and interest on their loans, for example.
Via the programme, we are offering banks loans of up to SEK 500 billion, on condition that the banks in turn lend the money to Swedish companies. To strengthen the programme and ensure that the money reaches companies, the Riksbank has also made it possible temporarily for more banks and credit institutions to gain access to our money. We are doing this because many small companies around the country are customers at smaller, local banks rather than at the major banks. Something else that often happen in times of crisis is that the demand for safe and liquid assets increases as agents try to dispose of riskier assets. The safest and most liquid asset on the financial markets is central bank money, money created by the central bank. The Riksbank has therefore taken measures to make it easier for banks to gain access to central bank money without having to sell their assets to a great extent. We have eased the requirements regarding the collateral banks can pledge when they borrow from the Riksbank. We have, for example, given banks generous opportunities to use a greater proportion of mortgage bonds and other covered bonds as collateral. More generous collateral requirements also strengthen the programme of corporate lending and simultaneously help to keep the large Swedish mortgage bond market running. We have also cut the lending rate for Riksbank loans overnight to banks from 0.75 to 0.20 per cent.