Riksbank lends SEK 60 billion over three months
Date
02/10/2008
It has recently become increasingly difficult to obtain long-term loans in the financial markets both in Sweden and abroad. The Riksbank has today taken a decision to establish a loan facility in Swedish krona of SEK 60 billion to increase access to credit with a longer duration. SEK 60 billion will be lent in the first auction.
”The international financial turbulence is now clearly affecting the financial markets in Sweden, Swedish banks and other financial market participants. Swedish banks have plenty of capital and limited loan losses, but the markets for long-term credit are functioning less efficiently. If this continues, there is a risk it will have negative effects on the credit supply for banks, companies and households in Sweden. The Riksbank is now taking measures to facilitate the supply of credit. If the situation were to deteriorate, the Riksbank and other government agencies are well-prepared to deal with the problems,” says Governor Stefan Ingves in a comment on the decision.
An increasingly large share of the Swedish banks’ funding is currently at very short durations. Where it is possible to find funding at longer durations at all, this is very costly. The difficulties for the banks in obtaining financing complicate the credit supply to companies and households. Today’s decision will increase access to long-term loans.
A first auction for the three-month loan will be held on Monday, 6 October, with an announced sum of SEK 60 billion. A further auction will be held on 27 October. More information on the loan facility will be published today on the Riksbank's website,
www.riksbank.se A press conference with Governor Stefan Ingves, Mattias Persson, Head of the Financial Stability Department, and Anders Vredin, Head of the Monetary Policy Department, will be held at 2 p.m. today at the Riksbank. Entry via the bank's main entrance, Brunkebergstorg 11. Press cards must be shown. The press conference will be broadcast live on the Riksbank’s website,
www.riksbank.se .