Debt Office wants clearer rules for foreign exchange reserves
(Thomson Reuters ONE) -
The rules for when and how the Riksbank can turn to the Swedish National Debt
Office and ask for loans to strengthen the foreign exchange reserves should be
clarified and set out in law. The rules ought to say that the Debt Office should
replenish the reserves after they have been put to use for lending. These are
the views of the Debt Office according to a response submitted to the
Government.
The Debt Office thus endorses the main elements of the proposals in the
Government inquiry "Financial independence and balance sheet of the Riksbank"
(SOU 2013:9), while refraining from expressing a specific view on what
constitutes a suitable level for the foreign exchange reserves.
The Debt Office notes that the inquiry's proposals are based on the established
principles for how the state's asset and liability management in general is
organised. These principles entail, for example, that the state does not earmark
funds other than in exceptional cases and does not tie up more capital than
necessary. This ultimately benefits tax payers. The Debt Office also emphasizes
that it is important that the limits on the Riksbank's balance sheet are decided
by the parliament and thus set out in law.
The Debt Office also backs the inquiry's proposal to strengthen and secure the
financial independence of the Riksbank by setting out in law that the bank has a
minimum amount of interest-free capital. This capital should be sufficiently
large to ensure that the interest income covers - with a margin - the costs of
running the Riksbank, and it should be topped up when needed.
Foreign exchange reserves to be replenished only after being put to use
When and how the Riksbank can turn to the Debt Office and ask for loans to
strengthen the foreign exchange reserves should be set out in law. The rules
ought to say that the Debt Office should bring the reserves back only after they
have been put to use for lending. This means that it would no longer be possible
for the Riksbank to decide unilaterally to strengthen the reserves through loans
from the Debt Office. The Debt Office's ability to borrow in foreign currency
when the need arises gives more than adequate safety.
The same procedures should be applied to Sweden's lending to the International
Monetary Fund (IMF). This means that when the IMF asks the Riksbank to transfer
funds, the Debt Office will borrow corresponding amounts and transfer them to
the Riksbank. Currently, loans to the IMF are financed from the foreign exchange
reserves, a setup that reduces the Riksbank's access to foreign currency to be
used for other purposes.
The Debt Office also concludes that the handling of the costs for Sweden's loans
to the IMF should be reviewed. Currently, they are covered from the Riksbank's
net interest income. This is not in line with the principles in the Budget Act
on how costs to the state should be reported.
For more information:
Linda Rudberg, press officer, +46 8 613 45 38
Response on Financial independence and balance sheet of the Riksbank:
http://hugin.info/133745/R/1705747/564337.pdf
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Source: Riksgälden via Thomson Reuters ONE
[HUG#1705747]
Unternehmensinformation / Kurzprofil:
Datum: 30.05.2013 - 12:00 Uhr
Sprache: Deutsch
News-ID 264875
Anzahl Zeichen: 3958
contact information:
Town:
Stockholm
Kategorie:
Business News
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