Thedéen welcomes international discussion of lessons learned from recent problems in some US and Swiss banks

News Governor Erik Thedéen spoke today about the economic situation and the international discussion that followed recent unease on the financial markets at the Eurofi conference in Stockholm.

Erik Thedéen, governor

Erik Thedéen, governor.

“In Sweden, as abroad, inflation is still far too high. The high inflation affects in particular households that have small margins to begin with, but its development is negative for the whole economy. It is therefore important that inflation falls tangibly this year. This is why we decided on Tuesday to raise the policy rate by a further 0.5 percentage points.”

Mr Thedéen also said that the transition from a low-interest rate environment to rapidly rising interest rates has exposed certain vulnerabilities in the global financial system. He also mentioned the market unrest that arose in connection with the problems experienced by a number of banks in the United States and Switzerland in March this year Against this background in particular, Mr Thedéen highlighted the importance of regular updating of the regulatory framework and mentioned a number of issues that are now being discussed internationally.

“It is clear that money can be moved around at the touch of a button, while concern over banks can spread very quickly on social media. Even problems in somewhat smaller financial institutions, as in the case of Silicon Valley Bank, can have major contagion effects. These are factors that we need to take into account in the global discussion on how best to safeguard financial stability going forward. The same is true of how we can develop the macroprudential framework at global level for non-banks, which is not yet as well developed as that for the banking sector.”

Mr Thedéen concluded by saying that both price stability and financial stability are required for good economic development. He looks forward to taking part in the international discussion on how we can secure financial stability and what we can learn from recent events in the financial markets.

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Updated 27/04/2023