Ingves: Hearing on financial stability

"High indebtedness makes the economy vulnerable and it is important that we slow down this development." This comment was made by Governor Stefan Ingves, when he visited the Riksdag Committee on Finance today for this year's hearing on financial stability and macroprudential policy.

Mr Ingves began his presentation of the current situation by pointing to household indebtedness as the primary risk to financial stability. He also said that financial crises are often preceded by high and rapidly increasing indebtedness. Experience shows that economic downturns tend to be deeper and more protracted if they coincide with a financial crisis.

Mr Ingves emphasised the Riksbank's responsibility to have an overall view of the functioning of the payments system, a role the Riksbank has had for 350 years. One means of meeting the challenges entailed by developments in the payments market, including a severe decline in the demand for cash, could be for the Riksbank to issue digital central bank money – an e-krona, said Mr Ingves.

Minister for Financial Markets Per Bolund, Finansinspektionen Director-General Erik Thedéen and National Debt Office Director-General Hans Lindblad also took part in the hearing.