years ago was a painful lesson of what improper supervision and regulation of the financial sector can lead to. the reaction was an unprecedented regulatory effort from global standard setters such as the basel committee and financial stability board : more and better capital, liquidity requirements, central clearing when possible, and renewed focus on systemic risk with macro prudential supervision. and if things went wrong despite all this, institutions should have an option for resolution without recourse to public money. the covid pandemic was the first real test of the resilience this new regulation had built up in the banks. as the covid pandemic struck, we needed to introduce a number of measures to address the potential for liquidity shortfalls in the financial system and to take regulatory measures to help banks cope with the situation. for example, in 1 / 3 bis - central bankers'speeches sweden, we had built up resilience by raising the countercyclical capital buffer to 2. 5 per cent over a number of years. at the onset of the pandemic, we lowered this buffer to 0 per cent, freeing up a significant amount of capital. this leads me to my first point, the importance of usable capital buffers. this allowed the banks to continue to lend to corporates and households in spite of the fact that we were in a crisis situation. this time, the banks were part of the solution and not part of the problem as in the global financial crisis. this shows the importance of usable capital. another lesson from the covid pandemic was the importance of well - functioning bond markets. in sweden, banks have traditionally provided the bulk of credit provision to the private sector. in recent years, the market for non - financial corporate bonds in swedish kronor has grown in size. this means that we have two engines for credit provision : banks and financial markets. one way to look at this is to consider a twin - engine approach where we can use both engines and be less reliant on just one of them to foster economic growth. this also helps to spread the risks in the system. as the pandemic struck, it was the market - based engine that stuttered while the banks were able to continue to uphold the credit supply. a large outflow from some mutual funds followed as concerned investors wanted to make sure that their money was safe. it was clear that the swedish corporate bond market did not have the depth and liquidity to handle the turbulence that followed

proportion of the population, those between 20 and 64 years, will decline from 59 per cent in 2002 to 54 per cent in 2050. so, from having experienced a rise of almost one million people between 1950 and 2000, this group will increase by half as much, or by half a million people, over the next 50 years. this trend means, according to statistics sweden's forecasts, that the economically active population in sweden will have to support an increasingly large percentage of the young and old. today, each person of working age supports 0. 7 people that do not work. by 2050, it is forecast that each worker will have to support 0. 84 people. if we only look at the elderly, there are 0. 29 people that are 65 years or older for every worker. by 2050 this ratio is forecast to have risen to 0. 42. these developments will entail ever increasing demands on higher labour force participation among the elderly. according to a study by statistics sweden, the percentage of sweden's retirement pensioners that have to work to support themselves is forecast to rise by 50 per cent by 2035. one part solution to the problem comes from the immigrant population. it is people with a foreign background that are forecast to account for the net contribution to the economically active population. by 2015 it is forecast that approximately every fifth person in sweden between 20 and 64 years will have been born outside sweden or have foreign - born parents. meanwhile, the number of swedes with swedish - born parents will be fewer in 2015 than in 2000. people with a foreign background in sweden have found it difficult to get a foot - hold in the labour market. employment among people with a foreign background is around 30 per cent lower on average than among native swedes. were the employment rate for this group to be as high as the average for sweden's population, employment would rise by 96, 000 people. finally, the decisive factor for the labour supply is how many hours we work. the number of hours worked has fallen recently for several reasons : overtime has declined, part - time work has increased and absence to care for own children has also risen. but the single biggest reason and consequently the most serious problem in sweden is sick leave. both the number and length of absences due to sickness have risen sharply in recent years, thus entailing a reduction in working hours per employee. three years ago the number of hours worked increased by 2. 7 per cent. last year