Transcript Slides to the speech

My thoughts on
monetary policy
and financial
stability
SEB
May 4 2012
First Deputy Governor Kerstin af Jochnick
Slide 1. Highlights of my professional life
I worked at the Riksbank in the 1970s and 1980s….
…and at Finansinspektionen from 1990 to 2007.
Slide 2. Sweden is a small, open economy, and is highly
affected by economic activity abroad
GDP growth in the world and Sweden
6
6
4
4
2
2
0
0
-2
-2
-4
-4
Sweden
The world
-6
-6
80
85
90
95
Note. Annual percentage change, calendar-adjusted data.
00
05
10
Sources: IMF, Statistics Sweden and the Riksbank
Slide 3. Development in Europe is important to the Swedish
economy
Percentages of Sweden’s total goods exports
45
45
2000
40
40
2005
35
35
2011
30
30
25
25
20
20
15
15
10
10
5
5
0
0
Euro area
USA
UK
Denmark+Norway
Note. The percentages do not add up to 100 as not all countries are presented.
BRIC
Source: Statistics Sweden
Slide 4. How the debt crisis in Europe is managed is perhaps
the most important piece of the puzzle for the development
of economic activity
Development of public debt in various countries
200
200
Greece
Ireland
Italy
Portugal
160
160
Spain
120
120
80
80
40
40
0
0
90
92
94
96
98
Note. Net public debt as percentage of GDP.
00
02
04
06
08
10
12
14
Source: IMF World Economic Outlook, April 2012
Slide 5. Interest rates are low
Policy rates in the USA, euro area and Sweden
6
6
USA
Euro area
5
5
Sweden
4
4
3
3
2
2
1
1
0
0
04
Note. Per cent.
05
06
07
08
09
10
11
12
Source: Reuters EcoWin
Slide 6. Macroprudential policy – a new policy area
Monetary policy
Macroprudential
policy
Micro
supervision
Financial stability
Well-balanced
real economy
Slide 7. Sweden has a large and internationally-dependent
banking sector
Bank assets in relation to GDP
Note. Per cent. Data relates to December 2010.
Sources: ECB, European Commission, Swiss National Bank and the Riksbank
Slide 8. Sweden’s foreign dependence also applies to the
banks’ funding
The market funding of the major Swedish banks via Swedish parent and subsidiary
companies
3,500
3,500
Foreign currency
SEK
3,000
3,000
2,500
2,500
2,000
2,000
1,500
1,500
1,000
1,000
500
500
0
0
98
Note. SEK billions.
99
00
01
02
03
04
05
06
07
08
09
10
11
Sources: Statistics Sweden and the Riksbank
Slide 9. Swedish banks are already well-capitalised
Core Tier 1 capital ratios in the major Swedish banks according to Basel III
16
16
14
14
12
12
10
10
8
8
6
6
4
4
2
2
0
0
Handelsbanken
Note. Per cent. Third quarter 2011.
Nordea
SEB
Swedbank
Sources: Bank reports and the Riksbank