Sveriges Riksbank governor Stefan Ingves. Picture: TT NEWS AGENCY/ VIA REUTERS/JESSICA GOW
Specifically, the Riksbank doesn’t have the legal right to buy bonds issued by companies, even though it’s made clear it’s ready to do so as part of a recent package of emergency measures. Schullerqvist says the Riksbank needs to consider EU legislation on state aid as corporate bond purchases “may be considered supporting some specific parts of the economy”.
According to the bank, “The proposed bill limits the Riksbank’s capacity to act, for instance by not allowing the Riksbank to purchase other securities than government papers, unless there are special reasons, or making lending to the banks conditional on them increasing their lending to companies. If this bill had applied now during the coronavirus pandemic, it would have limited the Riksbank’s monetary policy toolbox and it would have been unclear what the Riksbank was allowed to do.
In April, Sweden’s syndicated public bond market only saw corporate issuance from investment-grade companies such as Volvo, Industrivarden and Scania CV, as well as state-owned entities including Jernhusen, Akademiska Hus and Sveaskog.
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