used these tools on three occasions. the first occasion was during the global financial crisis 2008 - 2009, when we offered the banks liquidity support, for instance, in the form of loans in sek at longer maturities, and loans in usd, and also approved a larger number of securities as eligible collateral. these measures secured the liquidity of the financial system, and this facilitated credit granting and reduced various risk premiums that limited the impact of monetary policy. 40 on the second occasion, at the beginning of 2015, inflation had been below the target of 2 per cent for several years, and the policy rate had been cut to zero, that is, close to the lower bound. in this situation, the riksbank began extensive purchases of government bonds, which were moreover extended on several occasions over the coming years. this is a measure that reduces maturity premiums, but it can also lead to lower rates on other assets, through the so - called portfolio balance channel. 41 it also has a signalling effect. if the riksbank counts on the policy rate being low going forward, it may contribute to market expectations of future short - term rates falling. with hindsight, we can see that the government bond purchases actually contributed to a more expansionary monetary policy with lower interest rates and a weaker exchange rate and that inflation therefore returned to the target after a while. 42 the third occasion was in connection with the outbreak of the pandemic last year. on this occasion, we made large bond purchases to retain the low interest rates and we provided various types of liquidity support, including offering the banks loans against collateral at three - month and six - month maturities at the policy rate, we eased the collateral requirements and provided loans to the banks for lending to companies ( funding for lending ). 43 these measures were important for the functioning of credit granting in the economy, and for the impact of the policy rate on other interest rates remaining normal. when the pandemic broke out, the riksbank already had a large portfolio of government bonds. we therefore primarily purchased mortgage bonds, whose risk premiums had risen rapidly at the start of the pandemic. this market is key to banks ’ lending, as most of their mortgage loans to households are funded via mortgage bonds. the purchases reduced risk premiums, which supported credit granting in the economy. risk premiums had also risen on corporate bonds. to reduce the risk premiums on corporate loans and support credit granting in general, 39 see

it with caution. going one step further – how to set the boundaries between banks and other financial institutions? in my opinion, it is very important to safeguard the general public ’ s confidence around the concept of a bank and it must be protected by a clear definition of a bank and what it can do. in sweden, the definition is based on the combination of a bank receiving deposits and being active in the payments system. however, a more common definition of a bank focuses on the combination of two activities, namely the receipt of deposits from the general public and the granting of credits to borrowers using these funds. in accordance with international practice, this combined activity should be a privilege of banks. other institutions may issue deposit - like instruments in high amounts and not directed to the small savers. to highlight their different characters, such instruments should not be protected by any depositor guarantee scheme. but apart from the deposits, most bank activities might also be open to other financial institutions and vice versa. insurance companies could sell savings products and banks could sell securities. should you allow “ financial conglomerates ” mixing banks, securities companies and insurance companies in the same groups? in line with my earlier views on a flexible financial system my opinion is that such structures should be allowed, provided of course that your laws and regulations allow for effective consolidated supervision of the whole financial conglomerate. the present development toward a blurring of the boundaries between the activities of different financial institutions makes it reasonable to allow financial conglomerates. broad groups conducting different activities may also be better able to diversify their risks and could thus be more resilient against financial shocks. are there reasons for retaining state - owned banks? an argument sometimes voiced is that they promote competition and provide services for certain parts of the population which are of little commercial interest to the other banks. the basel committee ’ s core principles accept state - owned banks as long as they are run and regulated on equal terms with other banks. but my own view is that you should avoid having state - owned banks. simply put : the government is not a good owner and manager of banks since the bank will come “ too close to the politicians ”. there is always a temptation for the government and parliament to use state - owned banks to provide what mistakenly looks like cheap services to the people. but there will be hidden costs for such services, not least in the form of disrupting competition in the banking sector. the government could certainly provide certain subsidized services if it so wishes,