The Swedish financial system is strong amid the market turmoil and the country's banks are well-capitalised, Central Bank Governor Erik Thedeen told reporters on Tuesday.
Central banks and regulators are scrambling to
reassure markets after bank collapses in the U.S. and Switzerland rocked investor's confidence this month.
"The Swedish banking system and the financial system are
strong. We have well-capitalized, profitable banks, so in that
sense we don't need to be worried," Thedeen said following an
extraordinary meeting of the Financial Stability Council.
"We should also feel secure in the fact that the
authorities that have the job to deal with this are working
closely together and are working with the government. So there
is good capacity to act should this head into another phase," he
added.
Thedeen also said the central bank was sticking to its
February message that incoming economic data will decide the
future path of interest rates and that a hike by 25 or 50 basis
points was still the main scenario.
"We are coming from a situation where inflation is very
high. We have an inflation target ... that we must reach, but we
have to get there in a sensible and well-balanced way so that we
don't create unnecessary turbulence or damage the economy
unnecessarily," he said.
"It is a difficult decision ... but it is going to be
extra-difficult in April."
(Reporting by Simon Johnson and Anna Rongstrom and Johan
Ahlander, editing by Terje Solsvik and Niklas Pollard)
