Riksbank Study: The major Swedish banks’ structural liquidity risks
Date
22/11/2016
For some time, the Riksbank has been of the opinion that the major Swedish banks have significant structural liquidity risks. The major Swedish banks have a greater mismatch between the maturities of their assets and the maturities of their liabilities in relation to many other European banks. This Riksbank Study surveys the major Swedish banks’ structural liquidity risks. The study also analyses how these risks can be reduced.
Possible measures to reduce the major Swedish banks' structural liquidity risks include increased transparency in their operations, stricter regulations, further regulatory measures, incentives for the banks' customers to choose longer interest-rate fixation periods and investigating whether the Swedish Covered Bonds Issuance act needs to be amended.
The Riksbank Study contains three separate articles:
The first article compares the major Swedish banks' structural liquidity risks with those of other European banks. It also discusses where on the balance sheet the major Swedish banks' risks arise.
The second article discusses what regulators around the world have done since the financial crisis to reduce liquidity risks in banks, and which alternatives are on offer if they wish to reduce these risks further.
The third article analyses the major Swedish banks' mortgage operations and which alternatives are available if one wishes to extend the maturities for the banks' covered bonds.
