Standard-setting
Like other authorities with responsibility for financial stability, the Riksbank is also engaged in issues dealing with the financial regulatory framework. This is an important part of preventive work, dealing with everything from institutional aspects of international organisations to the way in which individual institutions are regulated and managed in the event of a crisis.
As the internationalisation of financial agents and markets increases, a growing amount of this standard-setting work takes place on an international level. Important international forums in which the Riksbank is active are the EU cooperation, the European System of Central Banks (ESCB), the International Monetary Fund (IMF), the G10 cooperation and the Bank for International Settlements (BIS). The last of these includes the Basel Committee, which sets international standards for banks. Within the framework of the EU cooperation, the Riksbank participates in the EU’s Economic and Financial Committee (EFC), which advises the ECOFIN Council and the European Commission on important economic policy and financial matters.
The Riksbank endeavours to formulate regulations to provide a greater economic benefit than cost. Regulations to promote financial stability can also lead to unwanted disruptions in the financial system. For example, regulations aimed at promoting financial stability can also result in financial services becoming more expensive. In addition, crisis management tools designed to prevent the spread of a financial crisis can lead to financial agents and depositors becoming more willing to take risks, as this safety net can mean that they will not be subjected to the full consequences of a crisis (this is usually called “moral hazard”).
Each year, the Riksbank also makes statements on proposed Swedish laws and regulations that have been submitted for comment, and responds to a large number of submissions. On the EU level, the Riksbank also responds to consultations regarding proposed directives and other EU and ECB matters. Responses to submissions and consultations are public and are published on the Riksbank’s website. In addition, the Riksbank also exercises influence by drawing attention to important regulatory issues via speeches by members of the Executive Board, articles, and conferences, both at home and abroad.
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If you wish to know more about the ECB, the EU, the BIS or the Basel Committee on Banking Supervision, click on the links below.