Financial Stability Report June 2010 Press conference 1 June 2010.
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Financial Stability Report June 2010 Press conference 1 June 2010
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Transcript of Financial Stability Report June 2010 Press conference 1 June 2010.
Financial Stability ReportJune 2010
Press conference 1 June 2010
Assessment of stability
The banks are well-prepared but
uncertainty has increased
Borrowing costs fo countries with weak public finances have increased The difference between ten-year government bond rates and the German government bond rate with the same maturity Basis points
Source: Reuters EcoWinChart 1:3
-200
0
200
400
600
800
1 000
jan-08 apr-08 jul-08 okt-08 jan-09 apr-09 jul-09 okt-09 jan-10 apr-10 jul-10
Ireland Sweden Portugal Spain Greece
Uncertainy has increased again TED spread - the difference betwen the 3-month interbank rate and treasury bill rate, basis points
0
50
100
150
200
250
300
350
400
450
500
jan-07
apr-07
jul-07
okt-07
jan-08
apr-08
jul-08
okt-08
jan-09
apr-09
jul-09
okt-09
jan-10
apr-10
0
50
100
150
200
250
300
350
400
450
500SwedenEuro areaUSAUnited Kingdom
Lower loan losses in period aheadResults before loan losses and loan losses, net in the major Swedish banksTotalled over four quarters, SEK billion, fixed prices as at 31 March 2010
Sources: The banks’ reports, SME Direkt and the RiksbankChart 4:2
-20
0
20
40
60
80
100
120
dec-90 dec-92 dec-94 dec-96 dec-98 dec-00 dec-02 dec-04 dec-06 dec-08 dec-10 dec-12
Profit before loan losses Loan losses, net
Main scenario loan losses, net, FSR 2009:1 Main scenario loan losses, net, FSR 2009:2
Largest losses from the Baltic countriesAllocation of loan losses during the period 2009-2012 per region in the Riksbank’s main scenarioSEK billion and per cent
Chart 4:4 Source: The Riksbank
58%
1017%
814%
58%
1931%
1322%
Sweden Nordic countries excl Sweden Estonia Latvia Lithuania Other countries
Future risks Unease over public finances in
Europe Risk of setbacks in implementing fiscal
consolidation Situation in the Baltic countries
Economic recession bottomed out Domestic weaknesses may be amplified
Swedish households An increased burden of debt may cause
problems in the long run
-20
-15
-10
-5
0
5
10
2006 2007 2008 2009 2010 2011
Greece Ireland Italy Portugal Spain Sweden
Strong Swedish public financesBudget total in selected EU countries, per cent of GDP
Chart B1 Source: Reuters EcoWin
-3
Future risks Unease over public finances in
Europe Risk of setbacks in implementing fiscal
consolidation Situation in the Baltic countries
Economic recession bottomed out Domestic weaknesses may be amplified
Swedish households An increased burden of debt may cause
problems in the long run
Economic recession bottomed outGDP, annual percentage change
Source: Reuters EcoWin Chart 2:34
-25
-20
-15
-10
-5
0
5
10
15
98 99 00 01 02 03 04 05 06 07 08 09 10
Estonia Latvia Lithuania
The internal devaluations have continuedNominal wages. Annual percentage change
Source: Reuters EcoWinChart 2:33
-15
-10
-5
0
5
10
15
20
25
30
35
dec-00 dec-01 dec-02 dec-03 dec-04 dec-05 dec-06 dec-07 dec-08 dec-09
Estonia Latvia Lithuania
Future risks Unease over public finances in
Europe Risk of setbacks in implementing fiscal
consolidation Situation in the Baltic countries
Economic recession bottomed out Domestic weaknesses may be amplified
Swedish households An increased burden of debt may cause
problems in the long run
In many countries real house prices rosesubstantially in the years prior to the crisisReal house prices in Sweden and abroad, index 1995=100
Sources: Reuters EcoWin, the BIS and the Riksbank
0
50
100
150
200
250
300
80 84 88 92 96 00 04 08 12
0
50
100
150
200
250
300SwedenDenmarkNorwayFinlandUnited KingdomUSA
Increased indebtedness Households’ debts in relation to disposable incomes (%)
0
20
40
60
80
100
120
140
160
180
70 74 78 82 86 90 94 98 02 06 10 14
0
20
40
60
80
100
120
140
160
180
Sources: Statistics Sweden and the Riksbank
The banks can manage a much worse outcomeThe banks’ Tier 1 capital ratio in the stress testPer cent
0
2
4
6
8
10
12
14
16
Handelsbanken Nordea SEB Swedbank1110
Handelsbanken SwedbankSEBNordea
11101110111012 121212
Chart 4:6 Source: The Riksbank
Stability assessment
The banks are well-prepared but
uncertainty has increased
