Martin Flodén: The Riksbank's bond purchases affect government finances
Speech by Mr Martin Flodén, Deputy Governor of the Sveriges Riksbank, at the West Sweden Chamber of Commerce, Göteborg, 9 November 2016.
Prior to the financial crisis of 2008, the Riksbank could make profits without taking any actual risks. The assets on our balance sheet mainly consisted of foreign debt securities while the main liability items were outstanding banknotes and coins and our equity. The assets generated a reliable return, although their value fluctuated with foreign exchange rates, while the liabilities were interest-free. The Riksbank could therefore easily fund the bank's operations as well as distribute a surplus to the government.