Two of our researchers on Swedish Riksbank’s losses
The Riksbank needs around 40 billion Swedish kronor from the state. Annika Alexius and Roine Vestman are interviewed in SvD Näringsliv about the major loss.
These are not pretend money. The Riksbank’s losses are a real cost.
Last week, Riksbank Governor Erik Thedéen announced that the bank may need around 40 billion Swedish kronor from the state to rebuild its own capital. Money that taxpayers will have to bear.
In connection with the statement, SvD Näringsliv published an article where Annika Alexius and Roine Vestman, researchers in economics, are interviewed at the office at Stockholm University.
”The loss of 80 billion Swedish kronor is more than what the state spends on the judiciary and almost as much as it invests in defense each year,” says Annika Alexius.
She argues that it is a significant amount of money that the Riksbank now needs. Roine Vestman agrees with her.
”These are not pretend money. The Riksbank’s losses are a real cost,” he says in the interview.
According to Roine Vestman, there are clear similarities between the Riksbank’s situation and the giant loss at the American bank Silicon Valley Bank last year.
”The Riksbank and Silicon Valley Bank incurred losses for the same reasons. They took a significant interest rate risk, and when interest rates rose, the value of their bonds fell, resulting in significant losses relative to their own capital.”
Furthermore, Roine Vestman argues that for a central bank to be able to manage a crisis, it is important that finances are sound.
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Text by: Anneli Eriksson
Last updated: January 17, 2024
Source: Department of Economics