For example, it will be easier to reduce the amount of NPLs if there is a reduction in the backlog of cases related to the household insolvency framework (the so-called Katseli law) that are still pending before the courts. In June the government presented an ambitious action plan that will be closely monitored in the context of the enhanced surveillance framework. Are you satisfied with the pace of e-auctions? A comprehensive approach involving all stakeholders must remain in place at all times to ensure that the e-auction system continues to be successful. We have seen a clear improvement here in recent months, but further progress in raising the number of auctions is needed, especially for properties located outside Attica. So we will continue to monitor the situation closely, in cooperation with the authorities. It is also important to recognise that e-auctions have incentivised borrowers (including strategic defaulters) and banks to work towards a mutually beneficial solution. There are indications of increased restructurings and settlements of loans now that eauctions have started. The ECB lifted the waiver for Greek government bonds. Wasn’t the enhanced surveillance sufficient to keep it? How much liquidity did banks have to get from ELA as a result of lifting the waiver? The minimum credit rating rule for ECB collateral eligibility pre-dates the Greek crisis. In 2010, we acknowledged that the rule could be procyclical and granted a waiver to countries under an EU/IMF programme, because policy conditionality and access to comprehensive information gave us confidence about the sovereign’s creditworthiness.

But obviously, it is also important for us to continuously assess how the Riksbank’s earnings will be affected during the course of the journey. This is something we have discussed in different contexts. 4 Our latest estimate indicates that the effect on earnings from the bond holdings could be quite close to zero seen over the entire holding period. But how earnings will be ultimately affected depends on how the interest rate develops in the future. Can households cope with higher interest rates? Swedish households current have record-high debts in combination with a large proportion of variable-rate mortgages (see Figure 7). As you are no doubt aware, the Riksbank has been concerned for many years about the high level of household indebtedness and the potential negative effects on the Swedish economy of rising interest rates or falling house prices. 5 From our horizon, it is therefore important to carefully analyse the interest-rate sensitivity of households. We have also returned to this issue on a number of occasions, most recently in the Monetary Policy Report in December. 6  4 See, for instance, “The Riksbank’s bond purchases affect government finances”, speech by Martin Flodén on 9 November 2016. 5 For example, we published an extensive inquiry into the risks on the Swedish housing market as early as in the spring of 2011. See Sveriges Riksbank (2011), “The Riksbank’s inquiry into the risks on the Swedish housing market”. 6 See “How are household cashflows and consumption affected by rising interest rates?” article in Monetary Policy Report, December 2018.