Opinion of the European Central Bank of 16 September 202 on the financing of Sveriges Riksbank (CON/2024/32)
Date: 2024-09-16
Institutions: European Central Bank
Subjects: legal basis

EN    

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 16 September 2024  

on the financing of Sveriges Riksbank 

(CON/2024/32) 

Introduction and legal basis 

On  26  June  2024  the  European  Central  Bank  (ECB)  received  a  request  from  the  Swedish  Ministry  of 

Finance for an opinion on a memorandum (hereinafter the ‘Memorandum’) concerning (1) amendments to 

the Law on Sveriges Riksbank 1 regarding the financing of Sveriges Riksbank (hereinafter the ‘proposed 

amendments to the Law on Sveriges Riksbank’), and (2) the implementation in Swedish law of amendments 

to Directive 98/26/EC of the European Parliament and of the Council 2 and Directive (EU) 2015/2366 of the 

European  Parliament  and  of  the  Council3  (hereinafter  the  ‘proposed  implementation  of  amendments  to 

Directives  98/26/EC  and  (EU)  2015/2366’,  and  together  with  the  proposed  amendments  to  the  Law  on 

Sveriges Riksbank, the ‘draft law’). 

The  ECB’s  competence  to  deliver  an  opinion  in  respect  of  the  proposed  amendments  to  the  Law  on 

Sveriges Riksbank is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European 

Union and Article 2(1), third indent, of Council Decision 98/415/EC 4, as the proposed amendments to the 

Law on Sveriges Riksbank relate to Sveriges Riksbank.  

In accordance with Article 17.5, first sentence, of the Rules of Procedure of the European Central Bank, 

the Governing Council has adopted this opinion. 

1. 

Purpose of the draft law 

1.1  Sveriges Riksbank’s petitions for restoration of equity 

1.1.1  According  to  the  Memorandum,  the  Swedish  Parliament  has  announced  that  the  Swedish 

Government will revert as soon as possible with legislative proposals that (1) clarify the conditions 

for  Sveriges  Riksbank’s  petitions  to  the  Parliament  for  the  restoration  of  its  equity,  where  the 

requirement for a petition is replaced by a possibility, and in particular clarify how the asymmetry in 

the accounting principles in respect of unrealised gains and losses is to be handled when restoring 

Sveriges Riksbank’s equity, and (2) meet Sveriges Riksbank’s need for stronger possibilities for self-

financing5. 

1  
2  

3  

4  

5  

Lag (2022:1568) om Sveriges riksbank. 

Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment 
and securities settlement systems (OJ L 166, 11.6.1998, p. 45). 

Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services 
in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 
1093/2010, and repealing Directive 2007/64/EC (OJ L 337, 23.12.2015, p. 35). 
Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national 
authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 

See page 2 and Section 2.2.1 of the Memorandum. 

 
 
 
 
 
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1.1.2  Currently, the Law on Sveriges Riksbank provides that if the equity of Sveriges Riksbank is less than 

one  third  (being  SEK  20  billion)  of  the  target  level  (SEK  60  billion)  (hereinafter  the  ‘target  level’), 

Sveriges  Riksbank  must  petition  the  Parliament  to  restore  its  equity.  The  petition  must  be  for  an 

amount that restores the equity to the base level, which is an amount equal to two thirds of the target 

level  (SEK  40  billion)  (hereinafter  the  ‘base  level’),  unless  unrealised  gains  on  the  balance  sheet 

justify restoration to a lower level or not at all. If required to secure Sveriges Riksbank’s ability to be 

self-financing in the long term, the petition may be for, at most, an amount that restores the equity to 

the  target  level.  The  equity  may  not  exceed  the  target  level,  unless  the  Parliament  decides 

otherwise6.  The  target  level  must  be  recalculated  each  year  in  accordance  with  the  annual 

percentage change in the consumer price index published by Statistics Sweden, and if the change 

is less than SEK 0 no recalculation is done7. For this purpose, Sveriges Riksbank’s equity consists 

of  primary  capital,  a  reserve  fund  and  retained  gains.  The  primary  capital  and  the  reserve  fund 

constitute restricted equity. Funds held in the revaluation accounts, as these revaluation accounts 

are  defined  in  Guideline  (EU)  2016/2249  of  the  European  Central  Bank  (ECB/2016/34)8,  are  not 

included in Sveriges Riksbank’s equity according to the Law on Sveriges Riksbank9.  

1.1.3  The proposed amendments to the Law on Sveriges Riksbank provide that if the sum of equity and 

unrealised gains on Sveriges Riksbank’s balance sheet, except for gold, amounts to an amount less 

than one third of the target level, Sveriges Riksbank may (rather than shall) submit a petition to the 

Parliament for the restoration of its equity. The petition must be for an amount that restores the sum 

of  equity  and  unrealised  gains  on  the  balance  sheet,  except  in  the  case  of  gold,  to  a  level 

corresponding to the base level. If required to secure Sveriges Riksbank’s ability to be self-financing 

in the long term, the figure may be for an amount that corresponds to the target level10. 

1.1.4  Regarding  the  scope  for  Sveriges  Riksbank’s  submission  of  a  petition  to  the  Parliament  for  the 

restoration of its equity to be formulated as a possibility instead of an obligation, the Memorandum 

states that this is because there may be reasons for Sveriges Riksbank not to submit a petition for 

restoration even though its equity has fallen below the levels set out in the Law on Sveriges Riksbank. 

The starting point should, however, be that the equity together with unrealised gains on the balance 

sheet, except for gold, amounts to the base level and that Sveriges Riksbank should submit a petition 

for restoration of its equity 11. 

1.1.5  Regarding  the  proposal  that  unrealised  gains  on  Sveriges  Riksbank’s  balance  sheet  (excluding 

valuation increases in respect of the gold reserve) should also be taken into account when calculating 

the  amount  to  which  a  petition  for  restoration  relates 12,  the  Memorandum  states  that  changes  in 

respect of the value of Sveriges Riksbank’s assets are, in accordance with Guideline (EU) 2016/2249 

(ECB/2016/34),  booked  on  the  liability  side  of  Sveriges  Riksbank’s  balance  sheet  on  certain 

revaluation accounts, which set out the difference between the value at cost and the market value. 

Furthermore,  the  Memorandum  states  that  in  accordance  with  Guideline  (EU)  2016/2249 

6  
7  
8  

9  
10  
11  
12  

See Chapter 8, Sections 9 and 15 of the Law on Sveriges Riksbank. 

See Chapter 8, Section 10 of the Law on Sveriges Riksbank. 
Guideline (EU) 2016/2249 of the European Central Bank of 3 November 2016 on the legal framework for accounting 
and financial reporting in the European System of Central Banks (ECB/2016/34) (OJ L 347, 20.12.2016, p. 37). 
See Chapter 8, Section 8 of the Law on Sveriges Riksbank. 

See Section 1.1 of the Memorandum (proposal to amend Chapter 8, Section 15 of the Law on Sveriges Riksbank). 
See Section 2.2.1 of the Memorandum. 
See Sections 1.1 (proposal to amend Chapter 8, Section 15 of the Law on Sveriges Riksbank) and 2.2.1 of the 
Memorandum. 

2 

 
 
 
 
 
 
 
 
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(ECB/2016/34) and the Law on Sveriges Riksbank, the value on such accounts is not to be included 

in the equity of Sveriges Riksbank. The main reason for this is that unrealised gains are not subject 

to dividends paid by Sveriges Riksbank to the State. In accordance with Guideline (EU) 2016/2249 

(ECB/2016/34),  unrealised  gains  and  losses  are,  however,  treated  asymmetrically  from  an 

accounting perspective in that unrealised losses are, for reasons of prudence, included in the result 

of Sveriges Riksbank at the end of the year, meaning that an unrealised loss (unlike an unrealised 

gain) affects Sveriges Riksbank’s equity negatively, while an unrealised gain does not affect Sveriges 

Riksbank’s  equity  positively13.  According  to  the  Memorandum,  the  asymmetric  treatment  of 

unrealised gains and losses means that it is difficult to assess how much equity Sveriges Riksbank 

is  in  need  of  after  both  large  increases  and  decreases  in  respect  of  the  value  of  its  assets  have 

occurred14. Furthermore, and pursuant to Guideline (EU) 2016/2249 (ECB/2016/34), the calculation 

of unrealised gains and losses is to be carried out security for security and currency for currency, 

meaning that unrealised gains in respect of each of the securities, currencies and gold may be used 

as a buffer against future losses only in respect of the same specific securities, currencies and gold. 

However, even though the value of Sveriges Riksbank’s revaluation accounts is not to be included 

in its equity, it may, subject to the abovementioned limitations, be used as a buffer against a decline 

in the equity since it may absorb future depreciation (i.e. it constitutes protection against Sveriges 

Riksbank’s equity decreasing in the near future) 15. 

1.2  Credit institutions’ deposits with Sveriges Riksbank 

1.2.1  The Law on Sveriges Riksbank contains a division between (1) Sveriges Riksbank’s monetary policy 

objectives, tasks and powers, and (2) its financial stability objectives, tasks and powers16, which, the 

ECB understands, results, inter alia, in Sveriges Riksbank’s ability to require a certain proportion of 

a  financial  company’s  investments  or  obligations  to  be  equivalent  to  the  company’s  deposits  at 

Sveriges Riksbank (minimum reserve requirements) being limited to monetary policy purposes. The 

Memorandum does not propose any changes to this provision in the Law on Sveriges Riksbank. 

1.2.2  The proposed amendments to the Law on  Sveriges  Riksbank  provide that if Sveriges  Riksbank’s 

equity  falls  below  the  target  level,  Sveriges  Riksbank  may  require  that  a  proportion  of  a  credit 

institution’s  deposits  and  debt  instruments  issued  (liabilities)  must  be  deposited  with  Sveriges 

Riksbank. The deposits and securities,  in proportion to which the required  deposits with Sveriges 

Riksbank would be defined, should be consistent with the guiding principles for the calculation of the 

reserve  base  in  accordance  with  Regulation  (EU)  2021/378  of  the  European  Central  Bank 

(ECB/2021/1) 17,18.  This  applies  to  Swedish  credit  institutions  and  branches  of  foreign  credit 

institutions.  The  share  of  a  credit  institution’s  deposit  with  Sveriges  Riksbank  may,  at  most, 

correspond  to  an  amount  that  means  that  the  sum  of  (1)  Sveriges  Riksbank’s  equity,  (2)  credit 

institutions’ total shares in such deposits and (3) financial companies’ total shares of deposits with 

13  
14  
15  
16  
17  

18  

See Section 2.1.2 of the Memorandum. 

See Section 2.2.1 of the Memorandum. 
See Section 2.1.2 of the Memorandum. 
See paragraphs 1.5 and 1.6 of Opinion CON/2020/13. All ECB opinions are published on EUR-Lex. 
Regulation (EU) 2021/378 of the European Central Bank of 22 January 2021 on the application of minimum reserve 
requirements (ECB/2021/1) (OJ L 73, 3.3.2021, p. 1). 

See Section 2.2.2 of the Memorandum.  

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Sveriges Riksbank by way of reserve requirements for monetary policy purposes, corresponds to the 

target level19.  

1.2.3  For the purposes of these new deposits by credit institutions at Sveriges Riksbank, debt instruments 

and deposits are not to be included as liabilities where they are debt instruments or deposits of other 

Swedish credit institutions, branches of foreign credit institutions or Sveriges Riksbank 20. Interest on 

such deposits of credit institutions with Sveriges Riksbank may be set at a negative amount only if 

the current policy rate is negative, in which case the interest rate on deposits may not then fall below 

the policy rate. Sveriges Riksbank may decide that a company that does not meet the requirements 

in respect of such deposits or in respect of deposits by way of reserve requirements for monetary 

policy purposes must pay a financial penalty to the State. The amount of the penalty will be equal to 

interest on the deficit, which will be equal to the current policy rate applicable on each day plus two 

percentage points, but not less than 1 %. The financial penalty may be reduced entirely or partially if 

there are special grounds 21. 

1.2.4  As  noted  in  the  Memorandum,  a  prerequisite  for  Sveriges  Riksbank  to  be  able  to  require  such 

deposits will be that its equity has fallen below the target level. The total deposits must at most be 

allowed to reach an amount such that the sum of equity, those deposits and the value of any reserve 

requirement corresponds to the target level. According to the Memorandum, reserve requirements 

are  to  be  considered  in  this  context  as  any  reserve  requirements  set  by  Sveriges  Riksbank  for 

monetary policy purposes that also give Sveriges Riksbank access to capital at low or no cost22. As 

stated in the Memorandum, Sveriges Riksbank’s income consists primarily of the yield on its own 

financial assets in the form of interest-bearing securities, while its costs may be divided into operating 

or interest costs. In addition to this income, Sveriges Riksbank also has income from fees for certain 

parts of its activities. Self-financing is in place when Sveriges Riksbank’s net interest income, i.e. the 

difference between interest income and interest expenses, covers the operating costs and financial 

provisions. The net interest income is determined by the interest rate earned on financial assets and 

the interest rate paid by Sveriges Riksbank on its interest-bearing debt. One factor that is central to 

Sveriges Riksbank’s ability to achieve a positive net interest income is that it has access to sources 

of funding on which it does not pay interest, referred to as cost-free capital. Traditionally, a central 

bank’s  (and  also  Sveriges  Riksbank’s)  cost-free  capital  consists  of  the  outstanding  volume  of 

banknotes and coins and its equity. The equity may be very low, and even negative, if the value of 

banknotes and coins in circulation is sufficiently high 23. 

1.2.5  However, the Memorandum notes that the trend in Sweden is that banknotes and coins are being 

used less and less. It will therefore be difficult to increase Sveriges Riksbank’s earnings capacity via 

this source and thus build up its equity. The decline in the use and amount of cash is a consequence 

of, inter alia, simpler and cheaper services for card payments and other electronic payments. The 

increasing share of electronic payments has also increased the demands on Sveriges Riksbank’s 

19  

20  

21  

22  

23  

See Section 1.1 of the Memorandum (proposal to introduce a new Chapter 8, Section 16 in the Law on Sveriges 
Riksbank). 
See Section 1.1 of the Memorandum (proposal to introduce a new Chapter 8, Section 16 in the Law on Sveriges 
Riksbank). 
See Section 1.1 of the Memorandum (proposal to introduce a new Chapter 8, Section 17 and a new Chapter 12, 
Section 3 in the Law on Sveriges Riksbank). 
See Sections 1.1 (proposal to introduce a new Chapter 8, Section 16 in the Law on Sveriges Riksbank) and 2.2.2 of 
the Memorandum. 

See Sections 2.1.2 and 2.2.2 of the Memorandum. 

4 

 
 
 
 
 
 
 
 
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settlement  system.  These  rapid  changes  also  increase  the  need  for  Sveriges  Riksbank  to  follow 

developments on the payment market and adapt its operations to them, particularly in relation to new 

types  of  risk  arising  in  digital  payment  systems.  These  and  other  new  demands  on  Sveriges 

Riksbank’s  operations  lead  to  increased  administrative  costs.  Sveriges  Riksbank’s  sources  of 

funding therefore need to include alternatives that cover large losses that have occurred because of, 

for  example,  monetary  policy  measures,  and  which  are  independent  from  the  use  of  cash. 

Furthermore, according to the Memorandum, it is reasonable that the financial institutions that benefit 

from Sveriges Riksbank’s activities contribute to its funding to some extent. It should therefore be 

possible for Sveriges Riksbank to decide that certain financial companies are to have interest-free 

deposits  with  Sveriges  Riksbank.  The  requirement  should  be  formulated  in  a  similar  way  to  the 

provision  on  reserve  requirements,  but  the  deposits  should  be  independent  of  monetary  policy 

objectives.  Instead,  the  purpose  of  such  a  new  requirement  must  be  solely  to  fund  Sveriges 

Riksbank’s activities. The financial companies to be covered by this obligation should be those that 

operate in Sweden (i.e. including institutions with a registered office or branch in Sweden) that benefit 

most from Sveriges Riksbank’s activities 24. Credit institutions, especially commercial banks, benefit 

from  Sveriges  Riksbank’s  activities  with  respect  to  Sveriges  Riksbank  supplying  a  system  for  the 

settlement  of  payments,  its  responsibility  for  financial  stability  and  preparedness  in  the  payment 

system  as  well  as  more  generally  from  the  conditions  Sveriges  Riksbank  provides  through  its 

monetary policy with regard to maintaining price stability25. 

1.2.6  According to the Memorandum, the deposits of an institution or branch should amount to a certain 

proportion of the liabilities of that institution or branch. The liabilities covered should correspond to 

the basic principles for calculating the reserve base under Regulation (EU) 2021/378 (ECB/2021/1). 

This  means  that  the  deposits  and  issued  debt  securities  of  the  institution  or  branch  should  be 

covered, with certain additions and exceptions. The portion of the liabilities that each institution is to 

hold as deposits with Sveriges Riksbank should be the same for all institutions, and they will thus 

contribute to the funding proportionally according to their size26. 

1.2.7  The Memorandum states that the starting point should be that the accounts into which the financial 

companies deposit the funds will be interest-free. Sveriges Riksbank may demand a negative interest 

rate for the deposits if its own policy rate (repo rate) is lower than 0 %. In this case, the interest rate 

on  deposits  will  not  amount  to  a  lower  percentage  than  the  policy  rate27.  In  the  same  way  as  for 

failure to comply with reserve requirements, Sveriges Riksbank should be able to decide on a penalty 

fee if a company does not comply with the deposit requirement28. 

1.3  Proposed implementation of amendments to Directives 98/26/EC and (EU) 2015/2366 

According to the Memorandum, the amendments to Directives 98/26/EC and (EU) 2015/2366 mean 

that  the  provisions  on  access  to  payment  systems  will  also  apply  to  settlement  systems  and  that 

payment  institutions  and  institutions  for  electronic  money  will  also  be  permitted  to  participate  in 

settlement  systems,  provided  that  they  fulfil  certain  requirements 29.  In  order  to  implement  these 

24  
25  
26  
27  

28  

29  

See Section 2.2.2 of the Memorandum. 
See Section 2.2.2 of the Memorandum. 

See Section 2.2.2 of the Memorandum. 
See Sections 1.1 (proposal to introduce a new Chapter 8, Section 17 in the Law on Sveriges Riksbank) and 2.2.2 of 
the Memorandum. 
See Sections 1.1 (proposal to introduce a new Chapter 12, Section 3 in the Law on Sveriges Riksbank) and 2.2.2 of 
the Memorandum. 

See page 2 and Section 3 of the Memorandum. 

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amendments,  corresponding  amendments  are  made  to  the  Law  on  systems  for  settlement  of 

obligations  on  the  financial  market30,  the  Law  on  payment  services 31,  and  the  Law  on  electronic 

money 32. 

2 

Monetary  policy  assessment  of  credit  institutions’  interest-free  deposits  with  Sveriges 

Riksbank 

2.1  Member  States  with  a  derogation,  such  as  Sweden,  do  not  yet  participate  in  the  third  stage  of 

economic  and  monetary  union  and  therefore  retain  their  powers  in  the  field  of  monetary  policy 

according to national law33. Nevertheless, each Member State with a derogation  has a legal duty 

under Article 131 of the Treaty to adapt the statutes of their national central banks (NCBs) to ensure 

compatibility,  inter  alia,  with  the  Treaty  and  the  Statute  of  the  ESCB,  in  view  of  the  potential 

abrogation of the derogation and the introduction of the euro in those Member States in accordance 

with Article 140 of the Treaty. Therefore, any legislative reform in Sweden should aim to gradually 

achieve legal convergence with the standards enshrined in the legislation of the European System 

of Central Banks (ESCB), in accordance with the convergence process obligations enshrined in the 

Treaty34. 

2.2  The  ECB  understands  that  the  envisaged  interest-free  deposits  with  Sveriges  Riksbank  made  by 

credit institutions operating in Sweden are intended to operate independently of Sveriges Riksbank’s 

monetary policy aims, and are instead only for the purpose of the financing of Sveriges Riksbank. 

The ECB understands that Sveriges Riksbank may decide whether or not to require credit institutions 

to  place  such  interest-free  deposits  with  Sveriges  Riksbank.  The  ECB  further  understands  that, 

although  Sveriges  Riksbank  may,  under  the  Law  on  Sveriges  Riksbank,  for  monetary  policy 

purposes, require that a certain proportion of a financial company’s investments or obligations are 

equivalent  to  that  financial  company’s  deposits  with  Sveriges  Riksbank  (reserve  requirements)35, 

such requirements cannot be used for the sole purpose of financing Sveriges Riksbank. 

2.3  The benefits of increasing Sveriges Riksbank’s earnings capacity need to be weighed against the 

side effects that this could have on Sveriges Riksbank’s monetary policy stance and its transmission, 

including any impact on the future cost and effectiveness of such monetary policy. The potential for 

such side effects increases with the scale of the  measure. The ECB understands that if Sveriges 

Riksbank’s  equity  falls  below  the  target  level,  but  remains  above  zero,  the  maximum  size  of  the 

unremunerated deposits would be limited (see paragraphs 1.2.1 and 1.2.3), keeping the potential 

side effects of the measure contained. At the same time, if Sveriges Riksbank’s equity were negative, 

the maximum size of the unremunerated deposits would increase proportionally, matching the extent 

to which equity becomes negative. In this case, a careful calibration of the unremunerated deposits 

is particularly warranted. The ECB understands that the proportionality principle36, to which Sveriges 

Riksbank has to adhere in the design of its measures, can ensure such a careful calibration as it 

30  
31  
32  
33  

34  
35  
36  

Lag (1999:1309) om system för avveckling av förpliktelser på finansmarknaden.  
Lag (2010:751) om betaltjänster. 

Lag (2011:755) om elektroniska pengar. 
See Article 139(2), point (c), of the Treaty, including the reference to Article 127(2) of the Treaty, and Article 42.2 of 
the Statute of the ESCB. 
See paragraph 3.4 of Opinion CON/2008/34 and paragraphs 2.1 and 2.6 of Opinion CON/2020/13. 
See Chapter 2, Section 6 of the Law on Sveriges Riksbank. 

See Chapter 1, Section 8 of the Law on Sveriges Riksbank. 

6 

 
 
 
 
 
 
 
 
 
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requires the Sveriges Riksbank to consider the potential negative impact of its measures so that the 

intended benefit stands in reasonable proportion to the costs and risks that the measure may entail. 

The proportionality principle therefore has the potential to limit the overall volume of unremunerated 

deposits and accordingly any outsized side effects on the transmission of monetary policy (see also 

paragraph 2.7 for further possible mitigations of potential side effects). 

2.4  The following considerations are particularly relevant for the proportionality assessment with a view 

to limiting unintended side effects of the measure. Requiring credit institutions to hold unremunerated 

deposits with the central bank withdraws liquidity from the banking system, affects credit institutions’ 

profitability by requiring them to hold a zero-return asset, potentially increases the cost of funding for 

credit  institutions,  and  may  give  rise  to  increased  volatility  in  money  markets.  Assuming  that  the 

unremunerated deposits are not considered  high  quality liquid assets  as they are  mandatory and 

cannot be withdrawn (in line with the treatment of minimum reserve requirements in the Eurosystem), 

their  introduction  reduces  the  amount  of  liquid  assets  available  to  credit  institutions 37.  This  could 

increase both the risk of liquidity shortfalls and the marginal cost of maintaining liquidity buffers. Also, 

lower profitability could reduce credit institutions’ ability to generate capital through retained earnings 

and may also reduce their attractiveness for investors, thus increasing the cost of raising additional 

capital.  As  the  required  deposits  are  to  be  proportional  to  certain  liabilities  of  credit  institutions 

(deposits  and  part  of  securities  issued),  the  introduction  of  such  a  requirement  would  de  facto 

increase the cost of funding via these liabilities. In addition, the proportionality of the required deposits 

in relation to certain bank liabilities implies that the increase in the cost of funding is likely to vary 

across credit institutions, depending, inter alia, on access to and holdings of different types of funding. 

Furthermore, the proportionality of the required deposits in relation to certain liabilities may give rise 

to  increased  volatility  in  money  markets  if  credit  institutions  attempt  to  reduce  these  liabilities 

temporarily  around  reporting  dates,  assuming  that  the  base  for  computing  the  unremunerated 

deposits is measured at a fixed reporting date. However, a careful design of the base could alleviate 

this  concern.  Overall,  the  introduction  of  –  and  release  from,  if  and  when  equity  is  restored  –  a 

requirement  to  hold  unremunerated  deposits  with  the  central  bank  may  affect  credit  institutions’ 

intermediation  capacity  and  have  an  impact  on  monetary  policy  transmission.  The  nature  of  this 

impact will depend on the calibration of the unremunerated deposits. 

2.5  Furthermore, requiring credit institutions to hold unremunerated deposits with the central bank could 

have an adverse  impact on the  effectiveness of future monetary policy interventions.  Large scale 

asset purchase (‘quantitative easing’) programmes can ease the monetary policy stance and stabilise 

financial markets in an efficient manner in periods of stress by transferring an appropriate amount of 

interest rate and liquidity risk from the private sector to the central bank’s balance sheet. The option 

to introduce zero-remuneration deposits ex post may, depending on the situation, transfer the interest 

rate  risks  back  to  the  private  sector  to  some  degree.  If  credit  institutions  internalise  that  the  risk 

transfer to the central bank is conditional on the risks not materialising, this could potentially dampen 

the impact of future asset purchases on longer term interest rates. Moreover, credit institutions might 

anticipate that Sveriges Riksbank could recalibrate the volume of unremunerated deposits whenever 

interest rate risks materialise in the future. Depending on the calibration of the proposed measure, 

37  

The Memorandum does not specify the treatment of the unremunerated deposits for the purpose of liquidity 
regulation. 

7 

 
 
 
 
 
 
 
 
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unremunerated deposits could therefore reduce the credibility and effectiveness of large scale asset 

purchase programmes. 

2.6 

Introducing  non-interest-bearing  deposit  requirements  could  also  create  incentives  for  credit 

institutions to adjust their liability structure towards liabilities that do not count in relation to the basis 

for computing deposit requirements. This would lower the volume of unremunerated deposits they 

would need to hold with the central bank. Such strategies could, however, undermine the efficient 

allocation of capital in the economy. At the same time, such strategies are likely to yield only marginal 

savings for credit institutions as long as the volume of non-remunerated deposits is relatively limited 

compared to their overall deposit base. 

2.7 

In view of these considerations, it appears warranted to implement requirements concerning non-

interest-bearing deposits in a transparent and predictable manner and to limit their overall volumes 

to avoid any outsized side effects on credit intermediation and the transmission of monetary policy. 

There is a degree of ambiguity about the overall volume of non-remunerated deposits that could be 

introduced following the materialisation of  losses. The proportionality principle should, in practice, 

alleviate these concerns. However, restricting the scope for non-remunerated deposits relative to the 

size of credit institutions’ balance sheets, in addition to the upper bound implied by the target level 

(see paragraph 1.2.3), would provide greater certainty about the maximum possible impact of the 

proposed  measure  on  credit  institutions.  A  limited  upper  bound  on  non-interest-bearing  deposits 

would therefore reduce the scope for side effects for credit intermediation and the transmission of 

monetary policy. At the same time, the ECB also recognises the benefits of the proposal to replace 

‘shall’ with ‘may’ in respect of the submission of a petition to the Parliament for the restoration of its 

equity as this would give Sveriges Riksbank more flexibility to take a longer term view of losses when 

its  earnings  capacity  beyond  the  near  term  is  not  impeded.  This  would  reduce  the  probability  of 

having to impose unremunerated deposits on credit institutions (or limit the imposed volume of such 

deposits) or submit a petition to the Parliament for restoration of its equity. 

3 

Financial independence 

3.1  The overall independence of an NCB, as required under Article 130 of the Treaty and Article 7 of the 

Statute  of  the  ESCB,  would  be  jeopardised  if  it  could  not  autonomously  avail  itself  of  sufficient 

financial resources to fulfil its mandate, i.e. to perform the ESCB-related tasks required of it under 

the Treaty and the Statute of the ESCB. Therefore, a Member State may not put its NCB in a position 

where it has insufficient financial resources and inadequate net equity to carry out its tasks. For all 

these  reasons,  financial  independence  implies  that  an  NCB  should  be  sufficiently  capitalised. 

Financial independence requires that in performing its tasks an NCB can independently assess the 

risks involved and has the power to decide on any necessary precautions to take. An NCB is best 

placed to make these assessments and needs to have the necessary tools to evaluate the relevant 

circumstances and to make forecasts 38. 

3.2  The ECB has consistently stated that any situation should be avoided whereby for a prolonged period 

of time an NCB’s net equity is below the level of its statutory capital or is even negative, including 

38  

See ECB Convergence Report, June 2024, pp. 27-28; paragraph 2.2 of Opinion CON/2009/53, paragraph 2.4.2 of 
Opinion CON/2009/83, paragraph 3.3 of Opinion CON/2014/24, paragraph 2.2 of Opinion CON/2014/27, paragraph 
3.1.1 of Opinion CON/2014/56, paragraph 2.3 of Opinion CON/2017/17 and paragraph 13.2.2 of Opinion 
CON/2020/13. 

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where losses beyond the capital and the reserves are carried over. Therefore, the event of an NCB’s 

net equity becoming less than its statutory capital or even negative would require that the respective 

Member State provides the NCB with an appropriate amount of capital at least up to the level of the 

statutory  capital  within  a  reasonable  period  of  time  so  as  to  comply  with  the  principle  of  financial 

independence39.  

3.3  The ECB notes that Sveriges Riksbank faces a number of financial risks, including those posed by 

its significant holdings of low interest-bearing government bonds and the anticipated decline in its 

seigniorage income due, inter alia, to the decrease in banknote usage in Sweden, in the context of 

the relatively large size of the banking sector in Sweden. Given these particular risks, it is important 

that Sveriges Riksbank maintains sufficiently strong financial buffers that can absorb possible future 

losses  and  safeguard  its  financial  independence  and  operational  effectiveness.  A  general 

consequence of the proposed amendments to the Law on Sveriges Riksbank is a partial unburdening 

of the State’s responsibility for the restoration of Sveriges Riksbank’s equity, which, in line with the 

proposed  amendments  to  the  Law  on  Sveriges  Riksbank,  would  also  fall  within  the  indirect 

responsibility of Swedish credit institutions and branches of foreign credit institutions in Sweden if 

Sveriges Riksbank makes use of the possibility to require these entities to hold interest-free deposits 

with Sveriges Riksbank where the equity of Sveriges Riksbank falls below the target level.  

3.4 

In respect of petitions by Sveriges Riksbank for the restoration of equity, the ECB understands that 

the draft law includes unrealised gains in the calculation on whether the sum of equity and unrealised 

gains amounts to one third of the target level. The ECB acknowledges that such unrealised gains 

that are accumulated in the revaluation accounts could be realised, via the sale of the related assets, 

and be used to cover losses arising from the materialisation of all types of risks. The ECB notes, 

however, that unless the related assets are sold, unrealised gains accumulated in the revaluation 

accounts  cannot  be  regarded  as  a  financial  buffer  against  all  risks  and  cannot  be  used  to  cover 

financial losses of whatever kind, as they serve to cover dedicated risks40. Furthermore, the amounts 

in  the  revaluation  accounts  may  be  volatile.  Accordingly,  they  should  be  considered  with  caution 

when assessing Sveriges Riksbank’s long-term loss-absorbing ability 41. 

3.5  The  Memorandum  states  that,  according  to  Guideline  (EU)  2016/2249  (ECB/2016/34),  the 

revaluation  accounts,  as  defined  therein,  are  not  to  be  included  in  equity.  The  ECB  would  like  to 

clarify that Guideline (EU) 2016/2249 (ECB/2016/34) contains no definition of equity and is therefore 

also silent on whether the revaluation accounts should be included in such definition.  

3.6  The Memorandum also states that the asymmetric treatment of Sveriges Riksbank’s unrealised gains 

and losses in Sveriges Riksbank’s accounts – in which unrealised losses are transferred to Sveriges 

Riksbank’s profit and loss accounts while unrealised gains are accumulated in revaluation accounts 

–  makes  it  more  difficult  to  accurately  quantify  Sveriges  Riksbank’s  recapitalisation  needs 42.  This 

consideration appears to be the motivation for the inclusion of unrealised gains in the calculation of 

the target level. However, the asymmetric treatment of unrealised gains and losses, which reflects 

39  
40  
41  
42  

See ECB Convergence Report, June 2024, p. 28; and paragraph 3.4 of Opinion CON/2023/24. 
See paragraph 3.3 of Opinion CON/2023/24. 
See paragraph 13.3.11 of Opinion CON/2020/13. 

See Section 2.2.1 of the Memorandum. 

9 

 
 
 
 
 
 
 
 
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the  prudence  principle,  is  one  of  the  cornerstone  principles  of  income  recognition  in  the  legal 

framework for accounting and financial reporting in the ESCB.  

3.7  As far as the petition itself is concerned, the Law on Parliament43 provides that the General Council 

and the Executive Board of Sveriges Riksbank may make submissions to the Parliament within their 

areas of competence44. The ECB understands that Sveriges Riksbank has an unrestricted right to 

submit petitions to the Parliament with respect to the restoration of its capital according to the Law 

on Parliament45. Furthermore, neither the Law on Sveriges Riksbank nor the proposed amendments 

to the Law on Sveriges Riksbank oblige the Parliament to legislate on the provision of capital after 

Sveriges Riksbank has submitted a petition to have its equity restored to the base level or to specify 

the time period within which the State should respond to Sveriges Riksbank’s petition46. A clarification 

on  the  Parliament’s  corresponding  obligation(s)  to  recapitalise  and/or  respond  to  the  petition  by 

Sveriges Riksbank seeking recapitalisation of its equity levels would be welcome47.  

3.8  As  noted  above,  the  proposed  amendments  to  the  Law  on  Sveriges  Riksbank  introduce  the 

possibility for Sveriges Riksbank to require certain financial companies to hold interest-free deposits 

with Sveriges Riksbank where the equity of Sveriges Riksbank falls below the target level. These 

deposits  are  to  be  independent  of  monetary  policy  purposes  and  for  the  exclusive  purpose  of 

financing  Sveriges  Riksbank’s  activities.  As  noted  above,  the  principle  of  financial  independence 

implies that an NCB must have sufficient means to perform its ESCB-related and national tasks. The 

principle of financial independence has, thus, an instrumental character in relation to the performance 

of the NCB’s tasks. Hence, the possibility for an NCB to avail itself of sufficient resources cannot 

operate to the detriment of the effective performance of its tasks, including monetary policy tasks. A 

decision  by  Sveriges  Riksbank  addressed  to  certain  financial  companies  to  hold  interest-free 

deposits with Sveriges Riksbank should be preceded by a thorough analysis of the impact of such 

deposits on Sveriges Riksbank’s ability to perform its tasks.  

This opinion will be published on EUR-Lex. 

Done at Frankfurt am Main, 16 September 2024. 

[signed] 

The President of the ECB 

Christine LAGARDE 

43    Riksdagsordning (2014:801). 
44        See supplementary provision 9.17.4 of the Law on Parliament. 
45        See paragraph 13.3.9 of Opinion CON/2020/13. 
46  
47  

See paragraph 3.3.6 of Opinion CON/2007/14 and paragraph 13.3.10 of Opinion CON/2020/13. 
The ECB has made clear the responsibility of the State to restore the central bank’s capital in specific 
circumstances. See paragraph 3.4 of Opinion CON/2023/24 and paragraph 3.3 of Opinion CON/2022/37. See also 
ECB Convergence Report, June 2024, p. 28 (second paragraph of the section entitled ‘Financial independence’). 

10