Preparedness to manage a financial crisis

It is important that the Riksbank is well prepared for a crisis in order to reduce the economic costs if a crisis does occur. A high level of preparedness is also an important part of the work to prevent financial crises.

There are several components to crisis preparedness:

 

  • Ongoing stability analysis
  • Practical ability to manage crises
  • Cooperation between authorities

Ongoing stability analysis

Qualitative ongoing stability analysis is important in enabling us to discover changes and vulnerabilities that can lead to a crisis at an early stage.

Practical ability to manage crises

To be able to manage a crisis it is important to have an efficient crisis organisation with routines for decision-making and various support measures. The Riksbank therefore regularly conducts crisis management exercises together with Swedish and foreign authorities and with the private sector. This enables us to maintain our knowledge and expertise and to further develop our crisis organisation.

Cooperation between authorities

As the Riksbank shares responsibility for managing a financial crisis with the government, the National Debt Office and Finansinspektionen, the authorities must cooperate closely. We have therefore agreed on the information we should share with each other and how.

 

The Riksbank, Finansinspektionen and the National Debt Office also cooperate in the Financial Stability Council. The aim of the Council is to discuss financial stability issues and how to counteract financial imbalances. If a financial crisis were to occur, the Council would act as a forum in which to discuss possible measures to manage the crisis.

Cooperation between central banks

Banks with subsidiaries and branches in several countries play an important role in the financial markets of the Nordic and Baltic countries. Cross-border banking groups provide benefits and improve efficiency in the financial system. At the same, they increase the risk that a problem arising in one bank or banking group can affect financial stability in more than one country. Agreements on sharing information and cooperation between central banks are therefore important in the work on preventing financial crises.

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