Governor Ingves at the Riksdag Committee on Finance: Hearing on financial stability
Governor Stefan Ingves participated today in the Riksdag Committee on Finance’s open hearing on financial stability.
Date: 28/01/2020 09:00
Speaker: Governor Stefan Ingves
“Expectations of low interest rates for a long time may lead to challenges for financial stability.” These were the words of Governor Stefan Ingves as he began his presentation at the Committee on Finance of the current financial stability situation. Governor Ingves also highlighted household indebtedness as a substantial vulnerability in the Swedish economy and advocated housing and tax policy measures to reduce the risks. Governor Ingves also pointed to the vulnerabilities of a large, concentrated and interconnected banking system like Sweden’s, where banks also have limited capital levels. As they lend to both households and companies, banks are also exposed to property price falls.
The Committee on Finance also discussed how Fintech and cyber threats can affect financial stability. Governor Ingves stressed the global nature of cyber threats and that the consequences of cyber attacks can easily spread across national borders. This, in combination with financial companies becoming increasingly cross-border, underlines the importance of international cooperation in this area. Furthermore, a cyber attack could constitute a systemic risk and close cooperation between the private and the public sector is therefore necessary to deal with the growing cyber threat.
In addition, Governor Ingves recommended that financial companies continue to strengthen their resilience to cyber attacks. “Cyber attacks will inevitably succeed and organisations must therefore prepare themselves so that they are able to deal with an intrusion”, the Governor said.
Governor Ingves told the Committee that the Riksbank had recently decided to adopt the TIBER-EU (Threat Intelligence‐based Ethical Red Teaming) framework, which makes it possible to test the resilience of participants in the financial system to cyber risks in an orderly manner. “Through this initiative, the Riksbank will coordinate cybersecurity tests of central players in the Swedish financial system over the next few years”, Governor Ingves concluded.
Minister for Financial Markets, Per Bolund, Finansinspektionen Director-General, Erik Thedéen, and National Debt Office Director-General, Hans Lindblad, also took part in the Committee hearing.