Riksbank should reduce balance sheet to avoid risks – Flodén
“Best way” of running down bondholdings is to hold bonds until maturity
The Sveriges Riksbank should start reducing its balance sheet to avoid risks derived from eventual higher rates on its bond holdings, deputy governor Martin Flodén said in a speech to the Swedish House of Finance today (April 13).
Before the financial crisis of 2007–09, the Swedish central bank had a balance sheet of Sfr200 billion, or approximately $23.7 billion. The bond-buying programme the Riksbank implemented to provide liquidity and foster growth has increased its balance sheet to Sfr870
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