lars nyberg : how do conflicts of interest in universal banking emerge and what are the arguments for a separation of commercial and investment banking? speech by mr lars nyberg, deputy governor of sveriges riksbank, at a seminar organised by the swedish bankers ’ association, the swedish securities dealers association and finansinspektionen ( the swedish financial supervisory authority ), stockholm, 26 august 2004. * * * i would like to begin by thanking the swedish bankers ’ association, the swedish securities dealers association and finansinspektionen ( the swedish financial supervisory authority ) for taking the initiative to organise this seminar. over the past year, in particular, we have seen the importance of open and thorough discussion of conflicts of interest in the financial sector. i hope that this seminar will contribute to an even deeper analysis of the problems we face. the present discussion has arisen in the wake of a number of international corporate scandals. it is perhaps sufficient to mention names such as enron, worldcom and skandia to indicate how much trouble can be caused by conflicts of interest. in sweden there are two conflicts of interest in particular that have received attention, although there are many other, possibly equally serious ones. the first is that many sellers of various financial services offered by banks and insurance companies have traditionally been presented as investment advisors rather than salespeople. the risk of a conflict of interest lies in the fact that their suggestions for investment have been designed more to promote the seller ’ s or the company ’ s interests rather than to fulfil the needs of the investor. the second example comes from the life insurance sector. when the life insurance part of a company buys services from the property and liability insurance part, there may be incentives to deviate from correct internal pricing, especially when one part of the company is a mutual company and the other is a profit - making company. another problem in an insurance company is how a surplus - or a deficit - should be distributed between different groups of insured parties. the question is whether, for instance, those receiving pensions now should share the burden of the insurance companies ’ poorer income, or whether they have had the level of their pension payments guaranteed. however, today we have gathered to discuss conflicts of interest in banks, and i have promised to talk about the classical conflict between commercial banking and investment banking. the conflict lies within the universal bank ’ s double role as lender and investment adviser. if a bank ’ s borrowers suffer

eva srejber : growth and competition - lessons from the past speech by ms eva srejber, first deputy governor of the sveriges riksbank, at sparbanken gripen, bastad, 25 august 2003. * * * thank you for the invitation to come here and speak on the occasion of sparbanken gripen ’ s 150th anniversary. in my speech today, i intend to attempt to draw some conclusions from the experiences of our economic history during this period. one of my conclusions is that swedish growth has been stimulated during the periods when we have allowed the market economy to operate under clear and fixed game rules, including a stable framework for both fiscal policy and monetary policy. if these conditions have not existed, we have paid a price in the form of weaker economic growth. this speech does not contain any signals regarding current monetary policy. the past 150 years have been an exciting time, in particular the first part of this period. this was when sweden changed from being a remote, developing country with a high infant mortality rate, widespread poverty and starvation, into a prominent industrial nation. around 1850 sweden entered into a dynamic period of rapid development and change. a wave of liberalisation swept across the country and opened up important markets. gdp growth amounted to more than 2 per cent a year, which was twice as high as the growth rate during the first half of the 19th century. a doubling of the gdp growth rate might not sound particularly exciting, but over time it has very major effects. an increase in the gdp growth rate from one to two per cent entails the standard of living doubling within 35 years instead of 70 years. for sweden the stronger growth rate during the second half of the 19th century meant that we emerged from the developing country stage. a number of factors contributed to this development. free trade was an important element. our exports abroad were central to this process, which was of course facilitated by the development of the railway system. during the first decades after 1850, there were three main export products contributing to a very rapid export upturn ; oats, iron and timber. the importance of exports of oats from the southern part of sweden is something of a curiosity. oats were the fuel of that time. all of the horses providing transport in industrial cities like london required oats and much of this came from gotaland. the construction of the railway, as well as investment in industry, housing construction and agriculture naturally required capital. this was mainly