began to lend money to the banks at longer maturities to secure their funding. during three months in autumn 2008 the riksbank increased its lending to the banks by more than around sek 450 billion. to begin with the riksbank granted loans in kronor at three - month and six - month maturities, but gradually the maturities were increased to twelve months. lending at a variable interest rate has declined over the past six months, but has been supplemented by the previously - mentioned lending at a fixed interest rate of almost sek 300 billion ( figure 7 ). figure 7 the riksbank ’ s lending in sek and usd sek billion sek, commercial paper usd sek, variable rate sek, fixed rate jul - 08 oct - 08 jan - 09 apr - 09 jul - 09 oct - 09 source : the riksbank. the riksbank has also granted loans in us dollars. during the crisis there was a shortage of dollars around the world and the banks experienced difficulty in obtaining funding in dollars. at most, lending in dollars corresponded to around sek 250 billion in spring 2009. since then the banks ’ interest in borrowing dollars from the riksbank has declined. quite simply, it has become cheaper for the banks to borrow dollars in the market than from the riksbank, which is a sign that the financial markets are gradually functioning better. these loans have now ceased. for simplicity ’ s sake i am talking about lending to the banks. but the correct designation for the group of institutions which can borrow from the riksbank is monetary policy counterparties. over the past year we have extended the number of counterparties who can act as counterparts in our fine - tuning transactions and introduced a new category of counterparties, known as restricted monetary policy counterparties, who can purchase riksbank certificates and take part in the riksbank ’ s auctions of loans at longer maturities, without being participants in the rix system. 1 we have also given special liquidity assistance in autumn 2008 to kaupthing and carnegie, which they have since repaid. all lending by the riksbank is against collateral. over the past year we have extended the eligible assets that can be used as collateral, but this still encompasses securities that are safe assets. the securities accepted are debt securities issued primarily by the swedish government and by swedish mortgage institutions. all increased lending by the riksbank ends up in some form of increased deposit on the riksbank

to facilitate their funding. as a result of this, the banks have had large liquidity surpluses and have to a great extent invested the surplus in the riksbank. there are several possibilities for doing so. firstly, the riksbank issues riksbank certificates every week with a one week maturity and at an interest rate that is the same as the repo rate decided on, that is, at present 0. 25 per cent. this assumes that the bank system – as is now the case – has a surplus and needs to invest money. if the bank system instead has a deficit, as was the case just over a year ago, then the riksbank will implement what are known as repos every week with a week ’ s maturity. this means that the riksbank buys securities from the banks with a simultaneous agreement that a repurchase will be made one week later and where the interest rate is the repo rate that has been decided. secondly, the riksbank carries out what are known as fine - tuning transactions every day to smooth the daily fluctuations in the bank system ’ s regular payments. the banks can invest money in the riksbank overnight at an interest rate of 10 basis points below the repo rate, that is, at present 0. 15 per cent. this also assumes that the bank system as a whole has a surplus towards the riksbank at the end of the day. if they instead have a deficit, the banks can borrow money from the riksbank overnight at a rate that is 10 basis points above the repo rate. the fine - tuning is normally very small, but during the crisis it has grown to entail very large amounts. thirdly, there are so - called standing facilities. the banks have the right to borrow from the riksbank overnight at a lending rate that is 50 basis points higher than the repo rate, and the right to invest surplus in the riksbank at a deposit rate that is 50 basis points lower than the repo rate. but these possibilities are very little used, as there are other alternatives that are more advantageous for the banks. something that has attracted relatively great attention internationally is the fact that the low repo rate and the application of an interest rate corridor of plus / minus 50 basis points for the riksbank's standing facility means that the riksbank in principle applies a negative interest rate for deposits in the riksbank. in practice, this is of little