Economic commentary: An examination of the liquidity coverage ratio (LCR) in Swedish kronor


In the Financial Stability Report 2014:1, the Riksbank recommended that a requirement for the Liquidity Coverage Ratio (LCR) in Swedish kronor be introduced. The background to this recommendation is that the Swedish banks' LCR levels in kronor are sometimes very low. This, in turn, may make them vulnerable to liquidity stresses, thereby threatening financial stability.

The aim of this Economic Commentary is to provide an account of the background work carried out in advance of this recommendation. This consists of both a descriptive section on the major Swedish banks' LCRs in different currencies from a balance sheet perspective and of a section dealing with the reasoning behind the recommendation and the impact analysis carried out.


Read the Economic Commentary here.


By Björn Jönsson

The author works in the Financial Stability Department of the Riksbank.

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