Kingdom of Sw eden Swedish National Debt Office Swedish National - - PowerPoint PPT Presentation

Kingdom of Sw eden

Swedish National Debt Office Swedish National Debt Office Euro Debt Crises and Effects Euro Debt Crises and Effects

• f New Regulations

World Bank Meetings

W hi O b 2010 Washington, October 2010

Thomas Olofsson, Director and Head of Debtr Management

Euro Debt Crises Euro Debt Crises

• Pre Crise condition with tight yield spreads

g y p

• After Lehman 2008 liquidity spreads widened
• Spring 2010 credit spreads widened after debt

p g p increase

• ECB ”QE” measures
• Debate on fiscal policy: need for budget

consolidation

• Strong commitment to Euro
• Special purpose vehicle

2

Spread to Germany Spread to Germany

Government Benchmarks, Bid, 10 Year, Yield, Close, EUR

250 150 175 200 225 Percent 75 100 125

• 25

25 50 Belgium Germany Spain Finland Netherlands Italy Source: Reuters EcoWin jan 08 mar maj jul sep nov jan 09 mar maj jul sep nov jan 10 mar maj jul sep nov

3

Spreads to Germany Spreads to Germany

Ränteskillnader mot tyska 10-åriga statsobligationer

250 150 200 Percent 50 100

• 100
• 50

France, EUR Sweden, SEK Spain, EUR Netherlands, EUR Source: Reuters EcoWin jan 07 mar maj jul sep nov jan 08 mar maj jul sep nov jan 09 mar maj jul sep nov jan 10 mar maj jul sep nov

4

If regulations don’t work – add more regulations

• Higher capital requirement

g p q

• Leverage ratios – postponed
• Ban of short-selling?

g

• Solvency 2
• Too big to fail-regulations

Too big to fail regulations

• Liquidity ratios
• The future role of banks in jeopardy?
• Plan B Plan C
• Plan B, Plan C…

5