financial stability report 2009:1 2-6-2009. financial markets

Financial StabilityReport2009:1

2-6-2009

Financial Markets

The central banks’ balance sheets

Index, January 2000=100

0

50

100

150

200

250

300

350

400

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

0

50

100

150

200

250

300

350

400

The Riksbank ECB Federal Reserve00 01 02 050403 09080706

Sources: Reuters EcoWin and BloombergChart 1:1

Three-month interbank rate relative to expected policy rate

Basis points

Source: BloombergChart 1:2

0

50

100

150

200

250

300

350

400

jan-07 apr-07 jul-07 okt-07 jan-08 apr-08 jul-08 okt-08 jan-09 apr-09 jul-09

US Euro area UK Sweden

Outstanding volumes in US commercial paper

USD, billions

400

500

600

700

800

900

aug-05 feb-06 aug-06 feb-07 aug-07 feb-08 aug-08 feb-09

125

150

175

200

225

250

Financial commercial paper (left scale)

Non-financial commercial paper (right scale)

Source: Federal ReserveChart 1:3

Outstanding volumes of EUR commercial paper

USD, billions

0

200

400

600

800

1000ja

n-0

8

feb

-08

ma

r-0

8

ap

r-0

8

ma

j-0

8

jun

-08

jul-

08

au

g-0

8

sep

-08

okt

-08

no

v-0

8

de

c-0

8

jan

-09

feb

-09

ma

r-0

9

Source: EuroclearChart 1:4

Ten-year government bond yields in various countries

Per cent

0

1

2

3

4

5

6

7

jan-07 maj-07 sep-07 jan-08 maj-08 sep-08 jan-09 maj-09

Germany France Greece Ireland Spain Sweden

Source: Reuters EcoWinChart 1:5

Swedish government bond yieldsPer cent

0

1

2

3

4

5


2 year 5 year 10 year


European countries’ borrowing requirements 2009, as a percentage

of GDPPer cent

0

5

10

15

20

25

30

Irela

nd

Belgiu

mIta

ly

Nether

lands

Portugal

Greec

e

Switzer

land

France

United

Kingdom

Spain

Austria

Sweden

Germ

any

Finla

nd

Denm

ark

Luxem

bourg

Net borrowing Refinancing Total

Source: FitchRatingsChart 1:7

Standard & Poor’s upgrades and

downgrades, per quarter


0

50

100

150

200

250Q

1-02

Q1-

03

Q1-

04

Q1-

05

Q1-

06

Q1-

07

Q1-

08

Q1-

09

Num

ber of

cha

nges

0

2

4

6

8

10

Balance

UpgradesDowngradesDowngrades in relation to upgrades (balance, right scale)

Credit spreads for corporate bonds in the United States and euro area

Basis points


0

100

200

300

400

500

600

700

jan-07 maj-07 sep-07 jan-08 maj-08 sep-08 jan-09 maj-09

AAA - euro area BBB - euro area Baa - US Aaa - US

Credit spreads for high yield corporate bonds in the United States

and euro areaBasis points

0

500

1000

1500

2000

2500


US Euro area


Global default rate, actual and forecast

Per cent

0

2

4

6

8

10

12

14

16

1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009


Difference between mortgage bond yields and government bond yield with two and five years maturity

respectivelyBasis points

0

50

100

150

200

250


5-year mortgage bond spread 2-year mortgage bond spread


Premiums in the CDS indexBasis points

0

50

100

150

200

250

300


North America - CDX Europe - iTraxx

Sources: EcoWin Reuters och BloombergChart 1:13

Stock market developmentsIndex, 28 December 2007=100

0

20

40

60

80

100

120

jan-08 apr-08 jul-08 okt-08 jan-09 apr-09 jul-09

Sweden - OMXS30 United States - S&P 500 Europe - STOXX


Implied stock market volatilityPer cent, 10 day moving average


0

10

20

30

40

50

60

70

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

United States - S&P 500 Sweden - OMX

Historical average, OMX Europe, STOXX

P/E ratios

0

5

10

15

20

25

30

35

40

dec-93

dec-94

dec-95

dec-96

dec-97

dec-98

dec-99

dec-00

dec-01

dec-02

dec-03

dec-04

dec-05

dec-06

dec-07

dec-08

dec-09

Sweden - OMXS30 Europe - STOXX

United States - S&P 500 Historical average, OMXS30, STOXX and S&P 500


The monetary base in SwedenSEK Billion

0

50

100

150

200

250

300

350

400

jan-08

feb-08

mar-08

apr-08

maj-08

jun-08

jul-08

aug-08

sep-08

okt-08

nov-08

dec-08

jan-09

feb-09

mar-09

apr-09

Banknotes and coins in circulation Banks deposits in the Riksbank

Banks holdings of Riksbank Certificates

Source: The RiksbankChart B1

GDP in Eastern EuropeAnnual percentage change

0

1

2

3

4

5

6

7

8

9

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Sources: The IMF and the RiksbankChart B2

GDP 2003-2007 and IMF forecast for 2009

Annual percentage change

Sources: The IMF and the RiksbankChart B3

-14

-12

-10

-8

-6

-4

-2

0

2

3 4 5 6 7 8 9 10

Average GDP growth 2003-2007

GD

P f

ore

cast

Estonia

Hungary

Poland

Czech Republic

Slovakia

Bulgaria

Romania

Latvia

Lithuania

Ukraine

Exchange rates against EURIndex, September 2008=100

50

60

70

80

90

100

110

120


Czech Republic Hungary Poland Romania Ukraine

Sources: Reuters EcoWinChart B4

Exposure to Eastern Europe, as a proportion of host country’s GDP

2008Per cent

0

10

20

30

40

50

60

70

Austri

a

Belgium

Sweden

Greec

e

Nethe

rland

s

Switzer

land

Italy

German

y

Franc

e

Sources: BIS and IMFChart B5

How has your propensity to take risk changed compared to six months

ago?Per cent

28%

34%

19%

12%7%

Greatlyincreased

Increasedslightly

Neitherincreased nordecreasedDecreasedslightly

Greatlydecreased


How has your institution’s buffer of liquid assets changed in relation to

six months ago?Per cent

17%

28%

20%

17%

5%

13%Greatlyincreased

Increasedslightly

Neitherincreased nordecreasedDecreasedslightly

Greatlydecreased

Don’t know


Do you consider that the financial crisis has peaked?

Per cent

46%

35%

19%

Yes

No

Don't know


The Swedish household

sector

The banks' lending broken down into Swedish and foreign households and

companies, December 2008Per cent

Swedish households 22%

Foreign property companies 8%

Foreign companies excluding property companies 27%

Foreign households 19%

Swedish property companies 9%

Swedish companies excluding property companies 15%

Source: The RiksbankChart 2:1

Banks' loan losses, allocated by geographical location, Q4 2008 and

Q1 2009Per cent of total loan losses

Sweden 18%

Other Nordic countries 27%

Baltic countries 39%

Other countries 16%


Households' financial net wealth in relation to disposable incomes

Per cent

0

20

40

60

80

100

120

140

160

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: Statistics SwedenChart 2:3

Households' nominal disposable incomes and saving ratioAnnual percentage change and per cent

0

2

4

6

8

10

12

14

1993 1995 1997 1999 2001 2003 2005 2007 2009 2011

Disposable incomes Saving ratio

Sources: Statistics Sweden and the RiksbankChart 2:4

Households' total borrowing from credit institutions



-5

0

5

10

15

20

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

Mortgage rate, interbank rate and repo rate

Per cent

0

1

2

3

4

5

6

7

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Interbank rate Repo rate

Mortgage rate - average Mortgage rate - average, new lending

Sources: Reuters EcoWin, Statistics Sweden and the RiksbankChart 2:6

Housing equity withdrawal in Sweden, the United Kingdom and

AustraliaPer cent of disposable income

-6

-4

-2

0

2

4

6

8

10

1996 1998 2000 2002 2004 2006 2008 2010

Sweden UK Australia

Sources: Reserve Bank of Australia, Reuters EcoWin, Statistics Sweden and the RiksbankChart 2:7

Households' debt and post tax interest expenditures

Per cent of disposable income

0

40

80

120

160

200

83 87 91 95 99 03 07 11

0

4

8

12

16

20

Debt ratio (left scale) Interest ratio (right scale)


Households below the margin, impaired loans and potential loan

lossesPer cent

0

1

2

3

4

5

6

7

8

2004 2005 2006 2007 2008(forecast)

2009(forecast)

2010(forecast)

Households below the margin Impaired loans Potential loan losses


Percentage debt, financial assets and real assets held by indebted households in

different income groupsPer cent

0

10

20

30

40

50

60

Income group 1 Income group 2 Income group 3 Income group 4 Income group 5

Share of total debts Share of financial assets Share of real assets


House prices in Sweden, Stockholm, Göteborg and Malmö regions

Index: 1986=100

0

100

200

300

400

500

600

700

1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Sweden Stockholm region Göteborg region Malmö region

Source: Statistics SwedenChart 2:11

Tenant-owned apartment prices, three-month moving average

SEK per square metre

0

10 000

20 000

30 000

40 000

2002 2003 2004 2005 2006 2007 2008 2009 2010Sweden Stockholm regionGöteborg region Malmö regionSweden excluding metropolitan areas

Source: www.maklarstatistik.seChart 2:12

Time to sale, sell houses and tenant-owned apartments in Sweden

Number of days, median

0

10

20

30

40

50

60

70

80

90

jan-08 apr-08 jul-08 okt-08 jan-09 apr-09

Single-family dwellings Tenant-owned apartments

Sources: Hemnet and www.maklarstatistik.seChart 2:13

Housing investments in relation to GDP, seasonally-adjusted data

Per cent

0

2

4

6

8

10

1993 1995 1997 1999 2001 2003 2005 2007 2009

Sweden Norway Denmark Spain UK USA

Sources: Reuters EcoWin, Statistics Sweden and the RiksbankChart 2:14

Number of housing starts in relation to population

Per cent

0,0

0,5

1,0

1,5

2,0

1981 1984 1987 1990 1993 1996 1999 2002 2005 2008

Sweden Norway Denmark UK Spain USA


Indebted households' interest ratio and debt ratio broken down into

different income groupsPer cent

0

50

100

150

200

250

Income group 1 Income group 2 Income group 3 Income group 4 Income group 5

2

3

4

5

6

7

Debt ratio (left scale) Interest ratio (right scale)

Sources: Statistics Sweden and the RiksbankChart B9

The Swedish corporate

sector

Current ratio in Swedish listed companies

Per cent

100

120

140

160

180

200

dec-98 dec-99 dec-00 dec-01 dec-02 dec-03 dec-04 dec-05 dec-06 dec-07 dec-08 dec-09

Sources: Bloomberg and the RiksbankChart 2:16

Debt/equity ratio in Swedish listed companies

Ratio

52

54

56

58

60

62

64

66



Profitability in Swedish listed companies

Per cent

0

2

4

6

8

10

12



Interest coverage ratio in Swedish listed companies

Ratio

0

1

2

3

4

5

6

7

dec-99 dec-00 dec-01 dec-02 dec-03 dec-04 dec-05 dec-06 dec-07 dec-08 dec-09


Lending rates on new loans signed

by non-financial companiesPer cent

0

1

2

3

4

5

6

7

de

c-0

5

jun

-06

de

c-0

6

jun

-07

de

c-0

7

jun

-08

de

c-0

8

jun

-09

Sources: Reuters EcoWin and the RiksbankChart 2:20

The number of company bankruptcies

broken down by company sizeTwelve-month moving average

0

100

200

300

400

500

600

700

800

jan-83

jan-85

jan-87

jan-89

jan-91

jan-93

jan-95

jan-97

jan-99

jan-01

jan-03

jan-05

jan-07

jan-09

1-9 employees 10-49 employees All companies


Bankruptcies during and after various crises in Sweden

Index, last month prior to beginning of crisis = 100

0

100

200

300

400

500

600

t=0 t=6 t=12 t=18 t=24 t=30 t=36 t=42 t=48 t=54

1990s crisis IT crisis Financial crisis


Corporate borrowing from credit institutions and fixed gross

investmentAnnual percentage change

-15

-10

-5

0

5

10

15

20

25

dec-97

dec-98

dec-99

dec-00

dec-01

dec-02

dec-03

dec-04

dec-05

dec-06

dec-07

dec-08

dec-09

dec-10

dec-11

Corporate borrowing from credit institutions Forecast borrowing

Gross fixed capital formation Forecast


Maturity structure for outstanding corporate bonds

SEK billion

0

10

20

30

40

50

60

70

80

2009 2010 2011


Maturity structure for corporate certificates 2009

SEK billion

Source: Euroclear Sweden AB and the RiksbankChart 2:25

0

20

40

60

80

100

120

140

SEK 110,3 130,1 84,4 63,6 9,1 11,2 19,9 3,9 21,2 2,2 1,0 0,6 0,8

mar-09

apr-09maj-09

jun-09 jul-09aug-09

sep-09

okt-09nov-09

dec-09

jan-10 feb-10mar-10

Corporate credit quality measured by expected Expected default frequency (EDF), historical

outcomes and forecasts according to the Riksbank’s main scenario

Per cent

0

1

2

3

4

98 99 00 01 02 03 04 05 06 07 08 09 10

0

1

2

3

4

Sources: Moody’s KMV Credit Edge and the RiksbankChart 2:26

Corporate borrowing from credit institutions and their securities funding in Sweden and abroad

SEK billion

0

500

1 000

1 500

2 000

2 500

3 000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Swedish credit institutions Debt securities in Sweden Foreign credit institutions

Debt securities abroad Trade credits

Sources: Statistics Sweden and the RiksbankChart B10

Total issued in the Swedish corporate bond market broken down

by issuerSEK billion

Sources: Bloomberg and the RiksbankChart B11

0

20

40

60

80

100

Government guarantee (including Volvo finans)Financial companiesOf which covered bondsNon-financial companiesLocal governments and companies and government-linked companies

The commercial

property market

Commercial property prices in Sweden and abroad


-30

-20

-10

0

10

20

30

40

95 96 97 98 99 00 01 02 03 04 05 06 07 08

Sweden Ireland France Netherlands Spain UK USA

Sources: Investment Property Databank (IPD), Reuters EcoWin, MIT Center for Real Estate and the RiksbankChart 2:27

Commercial property prices in Sweden


-10

-5

0

5

10

15

20

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

All properties Retail Offices Industrial Residential

Sources: IPD, Reuters EcoWin and the RiksbankChart 2:28

Real prices of office premises in city centres

Index 1981 = 100

0

100

200

300

400

500

81 83 85 87 89 91 93 95 97 99 01 03 05 07 09

Stockholm Göteborg Malmö

Sources: Newsec and the RiksbankChart 2:29

Average yield levels for modern

office premises in city centresPer cent

0

2

4

6

8

10

12

14

16

86 88 90 92 94 96 98 00 02 04 06 08 10

Stockholm Göteborg Malmö Five-year government bond yield

Sources: Newsec and Reuters EcoWinChart 2:30

Real prices and rents of office premises in Stockholm city centre


-50

-40

-30

-20

-10

0

10

20

30

40

dec-82 dec-85 dec-88 dec-91 dec-94 dec-97 dec-00 dec-03 dec-06 dec-09

Prices Rents


Real rents of office premises in city centres

Index 1981 = 100

0

50

100

150

200

250

dec-81 dec-84 dec-87 dec-90 dec-93 dec-96 dec-99 dec-02 dec-05 dec-08



Vacancy rate for office premises in city centres

Per cent

0

5

10

15

20

25

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008



Vacancy rate and nominal rents for office premises in Stockholm city

centrePer cent, SEK per square metre and year


0

1000

2000

3000

4000

5000

90 92 94 96 98 00 02 04 06 08

0

5

10

15

20

25

Rents (left scale) Vacancy ratio (right scale)

Price development of property shares

Index 29 December 1995=100

0

100

200

300

400

500

600

700

800

de

c-9

5

de

c-9

6

de

c-9

7

de

c-9

8

de

c-9

9

de

c-0

0

de

c-0

1

de

c-0

2

de

c-0

3

de

c-0

4

de

c-0

5

de

c-0

6

de

c-0

7

de

c-0

8

de

c-0

9

OMXS CREX


The property companies' credit quality measured according to the

EDFPer cent

0,0

0,2

0,4

0,6

0,8

1,0

1,2

1,4

1,6

1,8

dec-04 jun-05 dec-05 jun-06 dec-06 jun-07 dec-07 jun-08 dec-08 jun-09

Source: Moody's KMV CreditEdgeChart 2:36

The Nordic countries excluding

Sweden and Germany

House pricesAnnual percentage change

-15

-10

-5

0

5

10

15

20

25

30

2004 2005 2006 2007 2008 2009 2010

Germany Denmark Finland Norway Sweden

Sources: Reuters EcoWin and the BISChart 2:37

Companies’ borrowingsAnnual percentage change

-5

0

5

10

15

20

25

2004 2005 2006 2007 2008 2009 2010 2011 2012

Germany Denmark Norway Finland

Source: Reuters EcoWin and the RiksbankChart 2:38

Households’ borrowingsAnnual percentage change

-5

0

5

10

15

20

2005 2006 2007 2008 2009 2010 2011


Sources: Reuters EcoWin, ECB and the RiksbankChart 2:39

Expected default frequency for listed non-financial companies

Per cent

0

1

2

3

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Germany Denmark Norway Finland Sweden

Source: Moody’s KMV Credit EdgeChart 2:40

Expected default frequency for transport companies

Per cent

0

1

2

3

2005 2006 2007 2008 2009 2010



Expected default frequency for construction companies

Per cent

0

1

2

3

4

5

6

2005 2006 2007 2008 2009 2010



Commercial property pricesAnnual percentage change

-10

-5

0

5

10

15

2000 2001 2002 2003 2004 2005 2006 2007 2008


Sources: Reuters EcoWin, IPD and the RiksbankChart 2:43

The Baltic countries

GDPAnnual percentage change

-20

-15

-10

-5

0

5

10

15

mar-99 mar-00 mar-01 mar-02 mar-03 mar-04 mar-05 mar-06 mar-07 mar-08 mar-09

Estonia Latvia Lithuania


Real exchange rates for the Baltic countries

Index 2000=100

80

90

100

110

120

130

140

jan-00 jan-01 jan-02 jan-03 jan-04 jan-05 jan-06 jan-07 jan-08 jan-09


Source: The BISChart 2:45

Change in export and real exchange

rates for various countriesPer cent

-40

-35

-30

-25

-20

-15

-10

-5

0

-25 -20 -15 -10 -5 0 5 10 15

Percentage change in real exchange rate

Pe

rce

nta

ge

ch

an

ge

in

ex

po

rts

Poland

Hungary

Czech Republic

Estonia

Bulgaria

Latvia

Lithuania

Romania

Sources: BIS and Reuters EcoWinChart 2:46

Current accountPercentage of GDP, totalled over four quarters

-30

-25

-20

-15

-10

-5

0

dec-00 dec-01 dec-02 dec-03 dec-04 dec-05 dec-06 dec-07 dec-08



UnemploymentPer cent

0

4

8

12

16

20

jan-00 jan-01 jan-02 jan-03 jan-04 jan-05 jan-06 jan-07 jan-08 jan-09 jan-10


Source: EurostatChart 2:48

Real wagesAnnual percentage change

-5

0

5

10

15

20

25

de

c-0

0

de

c-0

1

de

c-0

2

de

c-0

3

de

c-0

4

de

c-0

5

de

c-0

6

de

c-0

7

de

c-0

8



Harmonised index for consumer prices


-3

0

3

6

9

12

15

18

00 01 02 03 04 05 06 07 08 09 10



Consumer confidence indicatorNet figures, per cent

-60

-50

-40

-30

-20

-10

0

10

20

jan-05 jul-05 jan-06 jul-06 jan-07 jul-07 jan-08 jul-08 jan-09 jul-09


Source: European CommissionChart 2:51

Household borrowingPercentage change from the previous month,

calculated as an annual rate

-20

0

20

40

60

80

100

jan-07 jul-07 jan-08 jul-08 jan-09


Sources: National central banks, Reuters EcoWin and the RiksbankChart 2:52

Corporate borrowingPercentage change from the previous month,

calculated as an annual rate

-20

0

20

40

60

80

jan-07 jul-07 jan-08 jul-08 jan-09


Sources: National central banks, Reuters EcoWin and the RiksbankChart 2:53

Households’ and companies’ debts in relation to GDP in the Baltic

countries and SwedenPer cent

0

20

40

60

80

100

120

140

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Estonia Latvia Lithuania Sweden

Sources: National central banks and Reuters EcoWin.Chart 2:54

Late payments in Estonia and Latvia

Per cent of outstanding loans

0

1

2

3

4

5

6

7

8

de

c-0

0

de

c-0

1

de

c-0

2

de

c-0

3

de

c-0

4

de

c-0

5

de

c-0

6

de

c-0

7

de

c-0

8

de

c-0

9

Estonia (more than 60 days) Latvia (more than 90 days)

Sources: Eesti Pank and the Financial and Capital Market CommissionChart 2:55

Ukraina

Industrial production in UkraineAnnual percentage change

Sources: Reuters EcoWin, State Statistics Committee of Ukraine and the RiksbankChart 2:56

-40

-30

-20

-10

0

10

20

30

jan-04 jul-04 jan-05 jul-05 jan-06 jul-06 jan-07 jul-07 jan-08 jul-08 jan-09 jul-09

Exchange ratesHryvnia per dollar and per euro

0

2

4

6

8

10

12

dec-95

dec-96

dec-97

dec-98

dec-99

dec-00

dec-01

dec-02

dec-03

dec-04

dec-05

dec-06

dec-07

dec-08

dec-09

UAH/USD UAH/EUR


Households' bank borrowing in foreign

and domestic currency in Ukraine

Per cent of nominal GDP

Sources: Reuters EcoWin, the National Bank of Ukraine, the IMF and the RiksbankChart 2:58

0

5

10

15

20

25

2003 2004 2005 2006 2007 2008

Foreign currency Domestic currency

Non-financial companies' bank borrowing

in foreign and domestic currency

Per cent of nominal GDP

Sources: Reuters EcoWin, the National Bank of Ukraine, the IMF and the RiksbankChart 2:59

0

10

20

30

40

2003 2004 2005 2006 2007 2008

Foreign currency Domestic currency

Developments in the banks

Distribution of net operating profits 2008

Per cent

Sweden 56%

Norway 13%

Finland 15%

Baltic countries 1%

Other countries 2%

Denmark13%

Sources: Bank reports and the RiksbankChart 3:1

The banks’ earningsSEK billion

0

20

40

60

80

100

120

2004 2005 2006 2007 2008 mars 2009

Net interest income Net commission income

Net results of financial transactions Other income


Lending per geographical area and borrower category

Per cent of total lending

0

20

40

60

80

100

Sweden Other Nordiccountries

Baltic countries Other countries Total

Households Companies, excluding property companies Property companies


Earnings distribution over the last three years

Per cent

0%

20%

40%

60%

80%

100%

SEB Handelsbanken Nordea Swedbank

Net interest income Net commission income Operations at fair value Other income


Net interest income in relation to interest-bearing assets

Per cent

1,0

1,1

1,2

1,3

1,4

1,5

1,6

1,7

1,8

1,9

97:4 98:4 99:4 00:4 01:4 02:4 03:4 04:4 05:4 06:4 07:4 08:4 09:4


The major banks’ securities-related commission income and turnover

and stock market indexIndex: 2003 Q 1 = 100

0

50

100

150

200

250

300

350

03:1 04:1 05:1 06:1 07:1 08:1 09:1

Kapitalförvaltningsrelaterade intäkter OMX-index Omsättning OMX Courtageintäkter

Sources: Bank reports, NASDAQ OMX and the RiksbankChart 3:6

Cost-effectiveness at the major banksPer cent

50

52

54

56

58

60

62

64

66

68

00:4 01:4 02:4 03:4 04:4 05:4 06:4 07:4 08:4 09:4


Allocation of assets weighted for risk

Per cent, March 2009

Credit risk 90%

Market risk 3%

Operational risk7%


Share valuation and CDS premiums

over the previous year

Sources: Bloomberg, Handelsbanken Capital Markets and the RiksbankChart 3:9

0,0

0,2

0,4

0,6

0,8

1,0

1,2

050100150200250

CDS premium in basis points, reversed scale

Ma

rke

t ca

pita

lisa

tion

in r

ela

tion

to e

qu

ity

Swedbank

SEB

Nordea

Handelsbanken

Market shares of lending in the Baltic countries

Per cent, March 2009

0%

20%

40%

60%

80%

100%


Swedbank SEB Nordea Other


The major bank’s loan lossesPercentage of lending

-0,6

-0,4

-0,2

0,0

0,2

0,4

0,6

0,8

1,0

00:1 01:1 02:1 03:1 04:1 05:1 06:1 07:1 08:1 09:1

Recoveries and reversalsRealised and probable loan lossesNet loan losses

Sources: Bank reports and the Riksbank.Chart 3:11

The major banks’ impaired loans,

loan losses and provisionsPer cent

-0,5

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

dec-97

dec-98

dec-99

dec-00

dec-01

dec-02

dec-03

dec-04

dec-05

dec-06

dec-07

dec-08

dec-09

0

10

20

30

40

50

60

70

80

90

Impaired loans, gross Loan loss level, net Provision ratio (right scale)


Earnings before loan losses and

loan losses (net) in the major banks

Summed up over four quarters, SEK billion, fixed prices, 31 Mars 09

Sources: Bank reports, SME Direkt and the RiksbankChart 3:13

-20

0

20

40

60

80

100

120


Profi t before loan losses Loan losses, net

Distribution of loan losses per region

in the Riksbank’s main scenarioPer cent

Sweden27%

Nordic countries excl Sweden

27%

Baltic countries32%

Other Eastern Europe

6%

Other8%


Distribution of loan losses in 2009 and

2010 in the Riksbank’s main scenario

Per cent

Nordea 36%

Swedbank 27%

Handelsbanken 15%

SEB22%


Tier 1 capital ratios including new issues

Per cent

0

2

4

6

8

10

12

March2008

March2009

March2008

March2009

March2008

March2009

March2008

March2009

Swedbank Nordea SEB SHB

Tier 1 capital ratio New issue


The core Tier 1 capital ratios of European banks

Per cent, first quarter 2009

Source: NomuraChart 3:17

0

2

4

6

8

10

12

14S

EB

No

rde

aH

an

de

lsb

an

ke

nS

we

db

an

k

Me

an

The banks’ sources of fundingPer cent

Debt securities issued 40%

Deposits 45%

Interbank, net 7%

Credit from the Riksbank 5%

Government-guaranteed

borrowing via the SNDO

3%


The banks’ deposits and lendingSEK billion

0

1000

2000

3000

4000

5000

6000

7000

8000

mar-01 mar-02 mar-03 mar-04 mar-05 mar-06 mar-07 mar-08 mar-09

Lending Deposits Deposit deficit


Annual change in the banks’ lending to other credit institutions

SEK billion

-150

-100

-50

0

50

100

150

200

05:1 06:1 07:1 08:1 09:1


The major bank with the lowest Tier 1 capital ratio after another bank

defaulted on its paymentsPer cent

0

1

2

3

4

5

6


Source.: The RiksbankChart 3:21

The banks’ actual Tier 1 ratios and

Tier 1 ratios in the stress test Per cent


0

2

4

6

8

10

12

14

SEB Swedbank Nordea Handelsbanken

31 Dec 2008 (actual) 31 Dec 2009 (stress test) 31 Dec 2010 (stress test)

Regulatory capital requirement,

economic capital and Tier 1 capital

As a percentage of balance sheet total, December 2008

0

1

2

3

4

5

SEB Nordea Swedbank SHBCapital requirement without transitional rules (Basel II)Economic capitalTier 1 capital after rights issue and decreased dividend

Sources: Bank reports and the RiksbankChart B12

Article:Global

recession and financial stability

Global GDP growthAnnual percentage change

-2

0

2

4

6

8

de

c-7

0

de

c-7

5

de

c-8

0

de

c-8

5

de

c-9

0

de

c-9

5

de

c-0

0

de

c-0

5

de

c-1

0

Sources: IMF and the RiksbankChart 1

Actual global level of defaults and forecast

Percentage of total number of companies

0

2

4

6

8

10

12

14

16

70 73 76 79 82 85 88 91 94 97 00 03 06 09 12

Sources: Reuters EcoWin and Moody’sChart 2

GDP growth during various crises


-20

-15

-10

-5

0

5

10

15

20

-4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Argentina 2001-02 Uruguay 2002 Sweden 1991-93

Finland 1990-93 Japan 1991-2001

4 quartersbefore the

crisis

Source: Reuters EcoWinChart 3

GDP growth during the Asian crisis 1997-1998


-20

-15

-10

-5

0

5

10

15

-4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Thailand South Korea Malaysia Philippines

4 quarters before the

crisis


Proportion of problem loans and GDP loss internationally in a selection of previous crises

Per cent

0

5

10

15

20

25

30

35

40

45

-15 -10 -5 0 5 10

Lowest measured GDP outcome

Hig

he

st

pro

po

rtio

n o

f p

rob

lem

loa

ns

Argentina

Finland

Indonesia JapanSouth Korea

Malaysia

Philippines

Sweden

Thailand

Uruguay

Source: Laeven, Luc and Valencia (2008),”Systemic Banking Crises: A New Database” IMF Working PaperChart 5

Credit spreads for corporate bonds in the United States

Basis points

0

500

1000

1500

2000

2500

99 00 01 02 03 04 05 06 07 08 09 10

Aaa Baa High-yield


financial stability report 2009:1 2-6-2009. financial markets

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