Regulatory Alerts2026-06-10
Added · Updated
Deepening: Banks need more active liquidity management
Sveriges Riksbank warns that banks must adopt more active liquidity management as central bank liquidity decreases due to quantitative tightening. The central bank identifies weak incentives, operational deficiencies, and stigma surrounding the use of standing lending facilities as key reasons why banks hoard reserves instead of utilizing the overnight loan market. To ensure effective interest rate steering, banks are urged to actively participate in liquidity redistribution and regularly test their operational capacity to borrow from the Riksbank.
Topics
monetary
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