Sveriges Riksbank (Swedish Central Bank)
The Swedish Central Bank, formally known as the Sveriges Riksbank or simply Riksbank, is the central bank of Sweden. Established in 1668, the Riksbank is the world’s oldest central bank and the third oldest bank still in operation. The bank traces its roots to the private Stockholms Banco, which was founded in 1656 before collapsing in 1668. The new Riksbank was established under the control of Sweden’s parliament to prevent interference from the king. Known originally as the Riksens Ständers Bank, or the Bank of the Estates of the Realm, the Sveriges Riksbank adopted its current name in 1866. The bank is headquartered in Stockholm, Sweden’s capital city.
Issuing of bank notes in Sweden
The Sveriges Riksbank was originally not permitted to issue banknotes, although it began issuing credit-notes in 1701. The bank emerged as an important credit institution by the 19th century, when the Sveriges Riksbank’s role as a central bank was formalised in 1897 with the introduction of the Riksbank Act. The new legislation provided the bank with the exclusive right to issue bank notes, which until then were mainly issued by private banks. The ability to be the sole issuer of banknotes solidified the role of the bank is setting the country’s monetary policy. Since 1969, the bank has awarded the annual Sveriges Riksbank Price in Economic Sciences in Memory of Alfred Nobel, which is awarded with other Nobel Prices. In 2009, the Riksbank became the first central bank to apply a negative interest rate to counter the economic recession of 2008.
Role of the Swedish Central Bank
Under the authority of the Sveriges Riksbank Act and the Riksdag, Sweden’s parliament, the Riksbank’s main objective is to ensure that inflation is kept low and stable. Among its roles and responsibilities is overseeing Sweden’s monetary policy in order to influence inflation through the setting of the nation’s interest rate. By determining the level of the repo rate, also known as the repurchase agreement rate or official bank rate, the Riksbank can impact the level of economic activity in Sweden and the country’s rate of inflation.
The Swedish currency, Kronor
The Swedish Central Bank is also responsible for issuing the country’s banknotes and coins, as well as managing Sweden’s gold and foreign currency reserves. The official currency of Sweden is the Swedish krona, which is also recognised with the ISO code “SEK” and the currency sign “kr”. The krona is also known as the Swedish crown in English. As of 2012, the Riksbank issues five banknotes in denominations of 20, 50, 100, 500, and 1000 SEK. The Swedish Central Bank also issues three coins in denominations of 1, 5, and 10 kr.
Who leads the Swedish Central Bank
The Swedish Central Bank is led by a six-member Executive Board, which is appointed by the bank’s General Council. Among its members is the Governor of the Riksbank. The General Council itself is appointed by the Swedish parliament. As a collective, the Executive Board of the Riksbank is responsible for the bank’s activities, while the General Council’s role is to ensure that the Executive Board fulfils the Riksbank’s objectives. The General Council also makes decisions with respect to the design of banknotes and coins issued by the Riksbank.
News about the Swedish Central Bank
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