Sweden: Financial Sector Assessment Program–Technical Note on Crisis Management and Resolution

IMF Staff Country Reports, May 25, 2023

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Canonical URL: Sweden: Financial Sector Assessment Program–Technical Note on Crisis Management and Resolution

The Swedish financial safety net and crisis management arrangements rest on sound foundations and have been strengthened further by legislative and policy reforms in the financial sector.
Developing crisis management capacity within and between agencies is required to ensure credible crisis management plans, including for bank resolution.
On preparing for future bank failure, banks are yet to remove known barriers to resolvability, including:
- reporting capabilities on resolution valuation,
- funding in resolution,
- operational services dependencies.
The Riksbank should improve market transparency by publishing a policy framework describing the central bank’s lender of last resort bilateral liquidity facilities’ capability for crisis management purposes, including funding in resolution.
The Ministry of Finance should work to improve the operational independence of the SNDO by updating its funding arrangements.

Enhance inter-agency crisis management capacity to ensure credible crisis planning and execution, with specific focus on bank resolution readiness.
Require banks to address resolvability barriers by strengthening:
- reporting systems for resolution valuation,
- arrangements and clarity on funding in resolution,
- mapping and mitigation of operational services dependencies.
Riksbank action:
- Publish a policy framework on bilateral lender of last resort liquidity facilities to clarify crisis management capabilities and treatment of funding in resolution.
Ministry of Finance action:
- Update SNDO funding arrangements to strengthen its operational independence.