Identifying systemically-important banks in Sweden – what can quantitative indicators show us?

Elias Bengtsson, Ulf Holmberg and Kristian Jönsson describe new methods for measuring systemic risk in the financial system and what they say about developments at the major Swedish banks. The systemic importance of the four major banks increased ahead of the financial crisis, which led to increased risks when the full force of the crisis hit in 2008- 2009 and when the European debt crisis intensified in 2011. Thereafter the measures indicate declining risks in the Swedish financial system. However, the ranking of how systemically-important the four major banks are is affected by which measure is used. It is therefore important to use several different measures when assessing risks in individual banks and the financial system as a whole.

 

The article is included in this year's second issue of the Sveriges Riksbank Economic Review 2013:2, which was published on 18 September.