Svante Öberg: My views on the Riksbank and financial stability Speech by Mr Svante Öberg, First Deputy Governor of the Sveriges Riksbank, at a meeting with the Swedish Bankers’ Association, Stockholm, 7 June 2011. *  *  *  My term of office as Deputy Governor of the Riksbank is drawing to a close and I have announced that I will not be available for a new period of office. After almost six years on the Executive Board of the Riksbank, it feels natural for me to now reflect on the experiences we have had and what these may mean for the future. Earlier in the spring, I presented my view of the Riksbank and monetary policy. And now it is the turn of our other important main task, namely financial stability. In particular, there are three issues I would like to argue for:   The Riksbank and Finansinspektionen (the Swedish Financial Supervisory Authority) should be merged    The Governor’s role should be strengthened    The Riksbank should have a sufficient foreign currency reserve. I will begin my speech by looking back on the years prior to the most recent financial crisis, the risks we saw – and the ones we didn’t see. I will continue by describing the financial crisis and the measures we adopted during the crisis. I will then address the future and the work that is underway as regards reforming the framework of the financial sector.
Finally, I will take up the three issues I have just mentioned and explain the reasons for my views on these issues. For the sake of clarity, let me also add that the opinions I will be expressing in this speech are my own. They are not necessarily shared by my colleagues in the Executive Board of the Riksbank. The years prior to the financial crisis When I first arrived at the Riksbank, I did not suspect that we were about to experience one of the worst international financial crises of our times. I had been through two previous crises. The first of these was the deep recession at the end of the 1970s and start of the 1980s, when, through a series of devaluations, Sweden attempted to restore the competitiveness it had lost due to the severe price and wage inflation of the 1970s. The second was the crisis we experienced at the start of the 1990s. This was a fairly typical financial crisis, starting with the deregulation of the credit market and leading to a banking crisis, a deep recession and large public finance deficits. The Riksbank had built up its analytical capacity Its experiences in the Swedish banking crisis at the start of the 1990s had led the Riksbank to build up its analytical capacity before my time at the bank started. In 1997, the Riksbank started to publish a Financial Stability Report twice per year.