Financial Stability Report June 2010 Press conference 1 June 2010

Assessment of stability The banks are well-prepared but uncertainty has increased

Borrowing costs fo countries with weak public finances have increased The difference between ten-year government bond rates and the German government bond rate with the same maturity Basis points Source: Reuters EcoWinChart 1:3

Uncertainy has increased again TED spread - the difference betwen the 3-month interbank rate and treasury bill rate, basis points

Lower loan losses in period ahead Results before loan losses and loan losses, net in the major Swedish banks Totalled over four quarters, SEK billion, fixed prices as at 31 March 2010 Sources: The banks’ reports, SME Direkt and the RiksbankChart 4:2

Largest losses from the Baltic countries Allocation of loan losses during the period per region in the Riksbank’s main scenario SEK billion and per cent Chart 4:4Source: The Riksbank

Future risks Unease over public finances in Europe Risk of setbacks in implementing fiscal consolidation Situation in the Baltic countries Economic recession bottomed out Domestic weaknesses may be amplified Swedish households An increased burden of debt may cause problems in the long run

Strong Swedish public finances Budget total in selected EU countries, per cent of GDP Chart B1 Source: Reuters EcoWin -3

Future risks Unease over public finances in Europe Risk of setbacks in implementing fiscal consolidation Situation in the Baltic countries Economic recession bottomed out Domestic weaknesses may be amplified Swedish households An increased burden of debt may cause problems in the long run

Economic recession bottomed out GDP, annual percentage change Source: Reuters EcoWin Chart 2:34

The internal devaluations have continued Nominal wages. Annual percentage change Source: Reuters EcoWinChart 2:33

Future risks Unease over public finances in Europe Risk of setbacks in implementing fiscal consolidation Situation in the Baltic countries Economic recession bottomed out Domestic weaknesses may be amplified Swedish households An increased burden of debt may cause problems in the long run

In many countries real house prices rose substantially in the years prior to the crisis Real house prices in Sweden and abroad, index 1995=100 Sources: Reuters EcoWin, the BIS and the Riksbank

Increased indebtedness Households’ debts in relation to disposable incomes (%) Sources: Statistics Sweden and the Riksbank

The banks can manage a much worse outcome The banks’ Tier 1 capital ratio in the stress test Per cent Chart 4:6 Source: The Riksbank

Stability assessment The banks are well-prepared but uncertainty has increased