Cecilia Skingsley: Adapting to new conditions – monetary policy freedom with responsibility

Speech by Ms Cecilia Skingsley, Deputy Governor of the Sveriges Riksbank, at SEB's digital webinar, 20 May 2021.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Accompanying slides of the speech.

19 March, 2020. It's 6.30 am. I am standing waiting for a connecting bus at Danvikstull, on my way to the Riksbank at Brunkebergstorg. The telephone rings. It turns out to be Stefan Ingves, Governor of the Riksbank. He says that the Federal Reserve is offering dollar loans to us and a number of other central banks.

We Executive Board members had already had many conversations both in the office and over the phone during the preceding days.

Both in Sweden and abroad, the pandemic quickly led to a fall in economic activity of historical proportions. It was necessary to ensure as soon as possible that the financial system could manage to maintain credit granting at very low interest rates. A financial crisis on top of a health crisis and the rapidly emerging real economic crisis must be avoided. On the previous Thursday, 12 March, the Riksbank had decided to offer up to SEK 500 billion in loans to Swedish banks for onward lending to companies. On 16 March, the Riksbank decided to begin broad asset purchases for up to SEK 300 billion.

And what happened with the dollar loans? The same evening, 19 March, the Riksbank was able to publish the information that new dollar loans would be available with effect from the following week. Stefan's telephone message was a small, but clear glimpse of light in the first weeks of the pandemic. Belonging to the narrow group with back-up from the US central bank, the Federal Reserve, regarding dollar liquidity was of central importance during the financial turbulence.