. for short - term funding in swedish kronor there is a market for bank certificates. however, this market has shrunk ( see figure 3 ). we may wonder why this market has declined so dramatically when it seems that there should be incentives to maintain it. a thriving domestic market for bank certificates in kronor would increase the banks'scope for diversification. their dependence on markets in foreign currencies and on the swap market would be reduced. although these markets usually work well and swedish banks currently have a good reputation among investors this does not always need to be the case, as we saw in 2008 and 2009. we should of course think about how to create a liquid market for bank certificates in kronor. one problem is that the benefits of such a market fall to the banks collectively while the costs in the form of higher borrowing costs fall to each bank individually. in this perspective it may be necessary to investigate whether the costs that each individual bank pays for its shortterm funding in foreign currencies reflects the true costs to the swedish financial system and swedish society. bis central bankers ’ speeches figure 3 outstanding certificates issued by banks in swedish kronor sek billion note. refers to certificates issued by banks, mortgage institutions and other credit institutions. source : statistics sweden swedish conditions require a complement to the reform agenda the swedish banking system is thus marked by a number of characteristics that make it somewhat special in an international perspective – characteristics that either increase the risk of problems or the economic costs to society if problems arise in the banking sector. there are therefore good reasons for establishing a safe margin – a respectable distance – to the minimum regulations in the basel iii accord. as you know, we have already taken several steps to strengthen the swedish banking system, over and above the commitments that basel iii entails. in november 2011, the riksbank, the ministry of finance and finansinspektionen announced that the four major swedish banks would meet the capital adequacy requirements of 10 per cent of the risk - weighted assets from 1 january this year and of 12 per cent from 1 january 2015. all of the four major banks now have cet 1 ratios that are higher than 10 per cent according to the definition in basel iii. three of the banks are also above 12 per cent. the swedish authorities have also said that the banks should meet the short - term liquidity measure in basel iii ( the lcr ) both in total and separately for the euro

iii and hopefully a complete regulatory framework will be available at the end of 2014. i also hope that the work that has begun on a number of other important frameworks in the wake of the financial crisis will be finalised this year. this will entail a change in the focus of the committee ’ s work. going forward, the committee will place more emphasis on monitoring and assessing the application of the frameworks to ensure that the regulations are effective. the international regulatory work is extensive and will affect us directly when the regulations are introduced here in sweden. having a global regulatory framework that increases the safety margins in the global financial system will benefit everyone and is therefore important. it is also important to remember that the international discussion on regulations and regulatory frameworks has a lot in common with the discussion underway here in sweden. in the main, the measures proposed in basel iii aim to reduce risks that also exist in our swedish banks and that we have been pointing out for a long time. the international regulatory work therefore serves swedish interests – in other words, it is not a question of introducing regulations that have mainly been drawn up to manage problems that only concern other countries. moreover, discussions are underway in international forums that are similar to those underway here in sweden on many other policy issues, but perhaps not as much progress has been made abroad as in sweden on considering what measures can be introduced. one example of this is the discussion of floors for risk weights. finally : as things look today there are, in my opinion, specific circumstances in sweden, especially structural vulnerabilities, that justify continuing to complement the internationallyagreed requirements with stricter requirements in certain areas. one of the greatest risks i see as far as sweden is concerned is the mortgage market. the measures needed to come to terms with this have not been in focus here today, but this is certainly an issue i will return to. today, i have instead talked about international regulations and about sweden ’ s need to go further in some respects. those i have mentioned today are higher capital requirements, lcrs per currency, risk - weight floors for mortgages and the countercyclical capital buffer. in the case of the leverage ratio and the nsfr, we need to examine more closely whether the riksbank should work for stricter requirements in sweden than the upcoming international minimum requirements. bis central bankers ’ speeches