Sweden's Riksbank Pushes Banks to Test Liquidity Borrowing Capacity — Sveriges Riksbank

Event summary

Riksbank Governor Erik Thedéen urged banks to regularly test their ability to borrow from the central bank during a panel discussion on June 11, 2026.
The Riksbank is considering mandatory test transactions but is initially recommending voluntary testing of operational capacity.
Liquidity in the Swedish banking system is declining as the Riksbank reduces its holdings of Swedish securities.
The Riksbank has lowered the interest rate in the supplementary liquidity facility and removed collateral limits to encourage borrowing.

The big picture

The Riksbank's push for banks to test their borrowing capacity reflects broader concerns about liquidity management in a tightening monetary environment. As central bank holdings of Swedish securities decline, the demand for alternative liquidity sources increases, placing greater emphasis on the operational readiness of financial institutions. This move aligns with global trends where central banks are enhancing their tools to ensure financial stability amid evolving market conditions.

What we're watching

Regulatory Compliance: Whether Swedish banks will voluntarily comply with the Riksbank's recommendation to test borrowing capacity before mandatory measures are introduced.
Market Liquidity: The pace at which declining liquidity in the Swedish banking system will impact interbank lending and borrowing dynamics.
Monetary Policy: How further reductions in the Riksbank's deposit facility interest rate will affect banks' incentives to borrow from each other overnight.