##bank can use new methods and techniques to offer means of payment that are guaranteed by the riksbank in the same way as banknotes and coins. 16 the riksbank's role as supplier of liquidity in a changing world technological advances and structural changes affect not only the methods of payment, but also the risks and threats to the financial system. this means that the authorities need to regularly evaluate and test their crisis preparedness. the riksbank also needs to review and maintain its liquidity tools in good shape. although the banks are still central to the payments system and comprise a natural focus in the riksbank ’ s financial stability analysis, other agents such as central counterparties ( ccps ) are gaining increasing importance in the financial system. structural changes, such as the banks ’ funding or how they choose to organise their cross - border operations, affect the liquidity risks in foreign currency, among other things. this is something that the riksbank and other authorities must monitor. financial innovations such as trading robots and other types of automated financial services can contribute to greater efficiency, but they can also give rise to considerable liquidity stress. 17 in line with technological advances, the speed at which the transactions can be implemented is also increasing. the fact that money and securities can, at the touch of a button, be moved immediately from one continent to another, is something that hardly reduces the liquidity risks in the financial system. it also emphasises the importance of central banks having the capacity to quickly intervene if necessary. this requires having sufficient reserves on standby. liquidity decisive let me conclude with a reflection. many agents who have so far expressed an opinion on the issue have emphasised sweden's strong public finances as a compelling reason for reducing the riksbank's foreign currency reserve. but everyone knows that in an uneasy situation it is always liquidity that determines 16 see, for instance, skingsley ( 2016 ) : http : / / www. riksbank. se / documents / tal / skingsley / 2016 / tal _ skingsley _ 161116 _ eng. pdf and the riksbank's project plan for the e - krona : http : / / www. riksbank. se / documents / avdelningar / afs / 2017 / projektplan % 20ekronan _ 170314 _ eng. pdf. 17 see, for example, de nederlandsche bank ( 2016 ). 12 how well

speech date : 31 may 2017 speaker : deputy governor cecilia skingsley venue : seb, stockholm sveriges riksbank se - 103 37 stockholm ( brunkebergstorg 11 ) tel + 46 8 787 00 00 fax + 46 8 21 05 31 registratorn @ riksbank. se www. riksbank. se the central bank in an innovative and fast - paced world1 on 22 july 1668, a stockholm court sentenced a bank director to death. the bank director ’ s name was johan palmstruch, and he was the founder of the first bank in sweden, stockholms banco. a few years earlier, stockholms banco had suffered an acute liquidity shortage when a confidence crisis arose regarding the banknotes issued by the bank. when the bank was unable to pay its depositors, it was simply taken over by the then riksdag of the estates, and later became the precursor to sveriges riksbank. palmstruch was thus condemned to death unless he reimbursed the bank's creditors, which he of course was unable to do. the council of the realm eventually converted the death sentence into a prison sentence. and later, after the chancellor magnus gabriel de la gardie rushed to the defence of the deposed banker, palmstruch was finally granted a pardon. de la gardie also happened to be one of the bank's largest borrowers. it was possibly the chancellor's guilty conscience that made him advocate milder treatment of palmstruch. not long after he was released, more precisely on 8 march 1671, palmstruch died of natural causes. 2 a banking crisis every thirty years with this historical retrospective, i would like to remind you that as long as there have been banks, there have also been financial crises. and when financial crises have arisen, the state has often had to rush to the rescue in one way or another. in sweden alone, severe banking crises have occurred no less than nine times in the past 250 years. 3 this entails, on average, one crisis every thirty years. 1 thank you to johan molin, who has helped me write this speech. valuable comments were received from mats anderson, christina nordh berntsson, sara edholm, david forsman, mattias hector, martin w. johansson, gabriel soderberg and anders vredin. see wetterberg ( 2009 ). 3 see, for example,