central counterparty are that securities settlement can be both safer and more efficient. the transactions can be netted out 5 and the counterparty is known. the counterparty risks can be managed by the central counterparty obtaining collateral. moreover, the central counterparty has its own financial resources. the drawback with a central counterparty is that the market risks are concentrated to a single player – a high concentration of risk. provided the operations are properly organised, however, this is not a problem. still, the concentration of risk does mean that central counterparties are often systemically important. supervision and oversight are therefore highly relevant. 6 i shall leave counterparty risks for the moment and turn to the problem in the united states with insufficient market transparency. many american credit derivatives are non - standardised products and have therefore been inherently difficult to understand and value. if attempts were made to cope with the lack of transparency, one way would be to use electronic trading because this enhances market transparency and reduces the risk that access to information is not uniform. another important effect of electronic trading is that concentrating trading to one facility makes pricing more efficient. each order can be matched with the best price. moreover, new players can have better access to the market, which can improve market quality and strengthen competition. 7 so what is the situation in sweden? american credit derivatives have not had swedish owners to any considerable extent. neither is there a swedish credit derivatives market of any size. this is mainly because the swedish market for corporate bonds is small and without corporate bonds it is hard to trade in credit derivatives. so the problem with american credit derivatives that are traded over - the - counter does not exist in sweden. that does not dissuade us from reviewing the swedish securities market in the light of the problems that have been identified in the american market. securities trading can be arranged on an established market or over - the - counter ; in the latter case, the parties to the transaction settle it on their own. netting involves offsetting transactions against each other with a view to making the transactions cancel out as far as possible. the riksbank and finansinspektion ( the swedish financial supervisory authority ) evaluate nasdaq omx derivatives markets in accordance with the international standards in recommendations for central counterparties, published by cpss and iosco. for more information about electronic trading, see the implications of electronic trading in financial markets, report by a working group established by the committee on the global financial system of the central

strive for a good reputation as providers of complete and correction information. still, it is hard to ensure that the markets are liquid under every conceivable circumstance. if the participants suddenly become uncertain about asset values and if the counterparties are unfamiliar, a market can quickly become less liquid, which leads to high risk premiums. the current financial crisis has provided examples of this. investors are averse to putting money into assets whose value is highly uncertain ; they prefer the securities that are safest. rather than doing business with unfamiliar counterparties, investors prefer counterparty risks that can be managed. markets that are illiquid also have consequences for monetary policy because repo rate adjustments do not then have the intended impact. that brings me to this autumn ’ s financial market developments. events this autumn and measures by swedish authorities in mid september the swedish financial markets became seriously disturbed and swedish banks experienced growing problems with funding. an increasing share of bank funding was arranged at very short maturities. moreover, any funding that could be achieved at longer maturities cost the banks considerably more than normal. prior to this, in 2007 and 2008, the riksbank had no cause to take any extraordinary measures. unlike the case in many other countries, the overnight rate in sweden was stable and close to the policy rate, which meant that the intentions behind monetary policy were visible in the market. moreover, swedish banks still had good possibilities of obtaining funds, though this did cost more than before. 9 when lehman brothers filed for bankruptcy, however, the international financial crisis worsened. in this situation the riksbank and other swedish authorities introduced a number of measures so that markets would function better. the riksbank ’ s measures in this respect have aimed at making bank funding easier and thereby assisting the banks in the provision of credit to companies outside the financial sector. in order to make corporate funding easier, during the autumn the riksbank has lent more than sek 200 billion and usd 25 billion. besides these measures, aimed at getting the credit market to function more efficiently, the riksbank has taken more conventional monetary policy measures. the repo rate has been lowered during the autumn by a total of one percentage point – starting with 0. 5 percentage points on 8 october in a joint action with the federal reserve, the bank of england, the ecb, the swiss national bank and the bank of canada, followed by another 0. 5 percentage points on 22 october. the purpose of these interest rate cuts was to