The world’s oldest central bank

Today(June 1, 2017), we visited the world’s oldest central bank, Riksbank, which was established in 1668. The motto of the Bank is Hinc robur et securitas, which is Latin for “Herefore strength and safety”

Since 1668

Highly secured organization

Riksbank introduced and has maintained negative interest rates because the recession of Euro Zone lasted and ECB (European Central Bank)’s quantitative easing was expanded. It wanted to depend the appreciation of Swedish Krone.

 

There have been debates about the effectiveness of negative interest rates. Opponents of negative interest rates consist that the monetary policy could cause worsening profitability of commercial banks, instability of short-term money market, and deterioration of bond market liquidity.

 

However, Riksbank said that Swedish economy has not experienced these side effects of negative interest rates. South Korean economy has something in common with Swedish economy, in the way that they are small open economies and have high level of household debt ratio. So, I think that central banks of both countries could share their monetary policy, research, and policy.

 

I have been interested in the role and responsibility of central bank, and I want to research those more deeply with this visit to Riksbank.

 

Team #17-8