Sveriges Riksbank

Sveriges Riksbank
Bank name	Sveriges Riksbank
Headquarters	Brunkebergstorg, Stockholm
Established	16 September 1668
President	Therese Mattsson (Acting)
Leader title	Governor
Bank of	Sweden
Currency	Swedish krona
Currency iso	SEK
Borrowing rate	3.75%
Reserve requirements	None
Website	www.riksbank.se

Sveriges Riksbank. It is the world's oldest surviving central bank and the third-oldest bank in continuous operation. Founded in 1668, it has played a pivotal role in the development of the Swedish economy and the modern international financial system. The Riksbank is responsible for maintaining price stability through its monetary policy and for promoting a safe and efficient payment system in Sweden.

History

The bank was established by the Riksdag of the Estates in 1668 to succeed the failed Stockholms Banco, which is considered the first bank in Europe to issue banknotes. Throughout the 18th and 19th centuries, it operated as a central bank under the authority of the Riksdag, navigating periods like the Great Northern War and the Napoleonic Wars. A significant reform in 1897 gave it a monopoly on issuing banknotes, formalizing its modern central banking role. The 20th century saw its evolution through the Bretton Woods system and Sweden's subsequent adoption of various monetary regimes, leading to its current inflation targeting framework established in the 1990s.

Functions and objectives

The Riksbank's primary objective, as defined by the Riksdag, is to maintain price stability. Its core functions include formulating and implementing monetary policy to achieve its inflation target. It is also tasked with promoting a stable and efficient payment system within the country and ensuring the supply of banknotes and coins. Furthermore, the bank manages Sweden's foreign exchange reserves and contributes to the stability of the overall financial system, often in cooperation with Finansinspektionen and the Swedish National Debt Office.

Organization and governance

The bank is governed by a six-member Executive Board, which includes the Governor and First Deputy Governor, appointed by the General Council. This council is, in turn, appointed by the Riksdag. The Executive Board makes decisions on monetary policy and other strategic matters. The current acting Governor is Therese Mattsson, following the tenure of Stefan Ingves. The Riksbank's operations are spread across departments in its main building on Brunkebergstorg in Stockholm.

Monetary policy

Since 1993, the Riksbank has conducted an independent monetary policy focused on inflation targeting, with a mandate to keep CPI inflation at 2 percent. The main instrument for this is the policy rate (the repo rate), which influences interest rates throughout the Swedish economy. Decisions are made by the Executive Board at scheduled meetings, with minutes and extensive reports like the Monetary Policy Report published to ensure transparency. This framework was notably tested during the 2008 financial crisis and the COVID-19 pandemic.

The Riksbank and the Swedish economy

The bank's policies directly influence key economic variables such as interest rates, exchange rates, and credit conditions. By targeting inflation, it aims to create a stable environment for decisions made by entities like Svenskt Näringsliv and LO. Its oversight of the payment system underpins all economic transactions, while its management of foreign exchange reserves provides a buffer for the Swedish krona against external shocks. The Riksbank also conducts economic analysis that informs public debate and policy.

Notable events and controversies

A defining early event was the failure of its predecessor, Stockholms Banco, leading to its founding. In the 1930s, the controversial decision to abandon the gold standard under Ivar Rooth was a significant departure. The 1992 crisis, which forced the abandonment of the European Exchange Rate Mechanism, led to the adoption of inflation targeting. More recently, the world's first negative policy rate experiment from 2015-2019, debates over issuing an e-krona, and criticisms of its quantitative easing programs during the COVID-19 pandemic have been subjects of intense discussion in media like Dagens Industri and the Riksdag.

Category:Central banks Category:Banks of Sweden Category:1668 establishments in Sweden Category:Economy of Sweden