Stefan Ingves Extra meeting of the Riksdag Committee on Finance 16 August 2011

Rising long interest rates for countries with sovereign debt problems Ten-year government bond rates, per cent.

Weak public finances a problem Sovereign debt as percentage of GDP Source: IMF WEO April 2011

Adjustment programmes and sovereign debt EUR billion GreeceIrelandPortugal Funding through EU/IMF programmes Sovereign debt (2010) Sources: IMF and Eurostat

Some international events during the summer EMU: EFSF extended and empowered to buy government bonds on secondary market EMU: Cut interest rates on official loans to countries with support programmes EMU: Incentives for holders of Greek government bonds to exchange them for new ones with longer maturities EMU: ECB begins to buy Italian and Spanish government bonds EMU: New savings measures announced in Italy and Spain USA: Public debt ceiling raised. Savings of USD 2400 billion over the coming 10 years. USA: Standard & Poor downgraded US credit rating

Scope of the adjustment funds EUR billion EFSF (European Financial Stability Facility) EFSM (European Financial Stabilisation Mechanism) Extended EFSF* ESM** (European Stability Mechanism) PeriodCreated AmountApprox GuaranteeEuro countriesEU budget Earmarked for Ireland and Portugal 43,748,5 *Requires parliamentary approval of euro area countries ** ESM replaces EFSF and EFSM Sources: EFSF and European Commission

Large dependence on foreign marked funding The major Swedish banks’ market funding via Swedish parent and subsidiary companies, SEK billion Sources: Statistics Sweden and the Riksbank

Expected slowdown in GDP growth Sources: Statistics Sweden and the RiksbankQuarterly changed calculated as an annual change

The main task for monetary policy is the inflation target Forecasts from the July Monetary Policy Report Sources: Statistics Sweden and the RiksbankAnnual percentage change

Summary Swedish banks are well capitalised, and at present have no funding problems The Riksbank is ready and able to take action if required Statistics received so far are roughly in line with the most recent assessments of the Swedish economy, but prospects abroad look weaker The Riksbank will publish a new interest rate decision and new assessments on 7 September