Large Banks Central to Financial Linkages and Risk Transfer

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Economic Commentary
Mapping the Linkages between Swedish Credit Institutions – Foreign Exposures Marianna Blix Grimaldi, Lukas Guan Hallquist, Jieying Li, Samuel Namér, Anna Seim No. 4 2026, 25 June

Table of Contents 2
1 Introduction 3
2 Overview of foreign exposures 4
3 Foreign exposures by instrument type 6
4 Network structure of Swedish banks' foreign exposures 7 5 Identification of Swedish institutions with the largest foreign exposures 10 6 Conclusions 11 References 12

3
Abstract
Marianna Blix Grimaldi, Lukas Guan Hallquist, Jieying Li, Samuel Namér, Anna Seim¹ Marianna Blix Grimaldi, Lukas Guan Hallquist, Jieying Li and Samuel Namér work at the Riksbank's Financial Stability Department. Anna Seim is Deputy Governor.
______________________________________________________________________ As an extension of our previous analysis (Blix Grimaldi et al. 2026) on the network of domestic exposures between Swedish credit institutions, we examine in this economic commentary another dimension of these institutions' linkages by shifting focus to foreign exposures. Using COREP supervisory data on large exposures, we map the bilateral connections between Swedish credit institutions and foreign financial institutions. Our results indicate that a large share of the total large exposures of Swedish credit institutions to financial institutions is directed towards foreign financial institutions. The geographical distribution of foreign exposures is concentrated in the Nordic region for small and medium-sized Swedish banks, while it is more diversified globally for large banks. Similar to the pattern observed for domestic exposures, debt instruments account for the largest volume of foreign exposures. We also identify banks within the Swedish banking system that have the largest foreign exposures or hold the most significant exposures to key foreign counterparties. Our results suggest that Swedish large banks play a central role not only in channeling exposures within the domestic banking network but also in transferring risks across borders. ______________________________________________________________________ ¹ The authors wish to thank David Forsman and Olof Sandstedt, as well as seminar participants at the Riksbank, for valuable comments. The views expressed in this economic commentary are those of the authors and should not be regarded as expressing the Riksbank's position on the current issues.

1 Introduction
In the accompanying article by Blix Grimaldi et al. (2026), the analysis focused on the domestic linkages between Swedish credit institutions based on COREP supervisory data on large exposures. This economic commentary complements and extends the previous analysis by documenting the cross-border financial linkages of Swedish credit institutions to foreign counterparties. The analysis is primarily descriptive and aims to visualize the geographical distribution of exposures, highlight concentration patterns, and identify institutions playing a central role in the network. Mapping foreign exposures is a necessary step to understanding the external dimension of the Swedish financial system. Although this analysis does not explicitly assess risks or model transmission dynamics, it provides an empirical foundation for future work on cross-border spillover effects, shock transmission, and the interplay between domestic and foreign financial networks. Together with the aforementioned analysis of domestic exposures, this economic commentary contributes to the development of a framework for analyzing spillover risks in the increasingly interconnected and globally integrated Swedish financial system.

2 Overview of foreign exposures
The large exposure data from COREP used in this study are the same as those reported in Blix et al. 2026 on domestic exposures.² This means that counterparties are restricted to include only foreign financial institutions, and bank reserves at central banks or holdings of debt instruments issued by public authorities are not included in total exposures. In contrast to domestic exposure data, which cover both domestic lending and borrowing exposures for credit institutions within the Swedish banking system, the foreign exposures to abroad treated here are limited to Swedish credit institutions' lending exposures to foreign financial institutions, of which 94 percent are foreign credit institutions³. This restriction reflects the structure of the reporting framework. Data on foreign institutions' exposures to Swedish institutions are reported to foreign financial supervisory authorities and are therefore not available. The sample covers 109 Swedish credit institutions for the period from Q2 2021 to Q3 2025. The data cover 3 large banks, 15 medium-sized banks, and 91 small banks; see Table 1 for descriptive statistics. During the sample period, we identify an average of 394 unique outward large exposures from Swedish credit institutions to foreign institutions per period, which corresponds to 35 percent of the total number of combined domestic and foreign exposures. Exposures to abroad amount to 440 billion SEK, representing 40 percent of the total value of combined domestic and foreign exposures. Notably, the three large banks account for the largest share of foreign exposures by value, while smaller banks exhibit the highest number of connections to foreign counterparties. ² A detailed description of COREP's large exposure data is available in Blix Grimaldi et al. (2026). ³ The data are consolidated at the group level. Branches and subsidiaries of foreign banks operating in Sweden are treated as foreign financial institutions. The remaining six percent are classified as other financial companies than credit institutions and securities firms.

Table 1. Summary statistics of large exposure data

Swedish bank category	Number of institutions	Total assets (billion SEK)	Primary capital (billion SEK)	Domestic exposures: Number / Volume (billion SEK)	Foreign exposures: Number / Volume (billion SEK)
Large	3	9,449	518	23 / 156	60 / 252
Medium-sized	15	3,849	182	87 / 407	99 / 150
Small	91	1,002	117	624 / 235	38
All	109	14,300	818	734 / 674	394 / 440
Note: Total assets, primary capital, total domestic exposures, and total foreign exposures are in billion Swedish kronor. Data represent averages over the sample period.
Source: Sveriges Riksbank

The geographical distribution of foreign exposures, shown in Figure 1, exhibits a pattern concentrated in the Nordic region, where exposures to Denmark, Norway, and Finland account for 60 percent of the total volume of foreign exposures. For medium-sized and small banks, foreign exposures are primarily concentrated in the European Union. Large banks, on the other hand, have a more globally diversified exposure profile.
Figure 1. Foreign exposures by geographic region (Billion SEK)
Note: ROW refers to the rest of the world, UK refers to the United Kingdom, and Övriga (Other) refers to exposures lacking information on geographic regions. Data represent averages over the sample period.
Source: Sveriges Riksbank.

3 Foreign exposures by instrument type
Table 2 shows that when foreign exposures are broken down by instrument type, there is a clear dominance of debt instruments, consistent with the pattern observed for domestic exposures. For medium-sized and small banks, debt instruments account for more than 90 percent of their total foreign exposures, while the corresponding share for large banks is somewhat lower but still significant at 77 percent.
Table 2. Swedish banks' large foreign exposures by instrument type, million SEK

Swedish bank category	All banks	Large banks	Medium-sized banks	Small banks
Total	439,250	252,000	150,220	38,130
Debt instruments	369,000	196,000	136,000	36,000
Equity instruments	250	0.15	220	30
Derivatives	39,000	30,000	8,000	2,000
Off-balance sheet items	31,000	26,000	6,000	100
Note: Data represent averages over the sample period.
Source: Sveriges Riksbank.

Other instrument types play a relatively limited role. Equity instruments are negligible, especially for large banks. Derivatives and off-balance sheet exposures account for 8 and 7 percent of total foreign exposures, respectively. They are primarily concentrated in large banks' foreign exposures.
COREP's data on large exposures provide only information at the aggregated level for debt instruments and do not include further breakdown by specific types of debt instruments. As a complement, we therefore extract aggregated statistics per bank group on total lending to foreign monetary financial institutions (MFI) and holdings of foreign covered bonds from SCB and other internal data sources (Figure 2). Based on the MFI data, it appears that for Swedish large banks' foreign exposures in debt instruments within COREP primarily reflect their interbank lending to foreign MFIs. For small banks, the exposures are primarily associated with holdings of foreign covered bonds. For medium-sized banks, it can be deduced that exposures to foreign debt instruments consist of a combination of interbank lending to foreign MFIs and partially holdings of foreign covered bonds, together with a smaller share of other foreign debt instruments.

Figure 2. The Swedish banking system's interbank lending and holdings of covered bonds with foreign counterparties (Billion SEK)
Note: In the right diagram, all bank categories share the same axis. Data represent averages over the sample period.
Sources: SCB and Sveriges Riksbank.

4 Network structure of Swedish banks' foreign exposures In this section, we map the network of Swedish banks and their foreign counterparties. Figure 3 illustrates the network when defined in terms of total foreign exposures as well as debt instrument exposures, broken down by Swedish bank categories. In each network graph in Figure 3, the blue nodes in the inner circle represent Swedish credit institutions, while the nodes in the outer circle represent foreign financial institutions. Directed links (arrows) show exposures from Swedish credit institutions to their foreign counterparties. The thickness of each line reflects the average size of these exposures during the sample period from Q2 2021 to Q3 2025. Institutions are identified using letter-based aliases. Large institutions are assigned identification codes with one letter, medium-sized institutions with two letters, and smaller institutions with three letters.⁴ In the six graphs in Figure 3, we identify the ten largest foreign counterparties to which Swedish banks have the largest lending. These foreign institutions are marked with "F" followed by three-digit identification codes. The network visualizations reveal several interesting structural properties. First, networks based on foreign debt instruments closely mirror the networks for total foreign exposures across all bank categories, reflecting the dominant role that debt instruments play in the connections between Swedish banks and their foreign counterparties. This implies that shocks are likely transmitted via debt markets or interbank lending. Changed financing conditions at key foreign counterparties or credit market stress abroad can therefore have consequences for Swedish banks. The close correspondence between debt and total exposure networks suggests that debt-focused analyses capture most of the channels through which cross-border spillover effects can be channeled. At the same time, derivative exposures are reported in COREP on a net basis, meaning that potential spillover effects from derivatives may be underestimated. Second, the network structure shows, in line with the geographical patterns discussed in Section 2, a strong concentration within the Nordic region, especially for medium-sized and small banks. This regional concentration reflects the long-standing economic and institutional ties of the Nordic countries and well-integrated financial markets, but it also increases vulnerability to regional shocks. A negative development in one Nordic banking system or economy can thus quickly spread to the Swedish banking system through these dense connections. Notably, this concentration is not only regional but also institution-specific, with exposures to a relatively small number of foreign counterparties. Based on the aliases for the 10 largest counterparties, several foreign institutions appear repeatedly in the subfigures of Figure 3, indicating that they play a key role in the network and remain important from a
monitoring perspective. Furthermore, there is a clear asymmetry among Swedish credit institutions within each category regarding both the number and size of their foreign exposures. Among the three large banks, for example, Bank A has significantly more connections to foreign institutions than Banks B and C. Bank C, on the other hand, has two particularly large exposures of considerably greater size.

Figure 3. Network illustration of total foreign exposures and debt instrument foreign exposures by Swedish bank category

a. Large banks, total foreign exposures b. Large banks, debt instruments
c. Medium-sized banks, total foreign exposures d. Medium-sized banks, debt instruments
e. Small banks, total foreign exposures f. Small banks, debt instruments

Note: Each node in the inner circle represents a Swedish credit institution. Each node in the outer circle represents a foreign financial institution. The arrowed lines represent foreign exposures from Swedish credit institutions to foreign financial institutions. The thickness of the arrowed lines reflects the average size of the foreign exposures during the sample period from Q2 2021 to Q3 2025. ROW refers to the rest of the world, UK refers to the United Kingdom and Övriga (Other) refers to exposures that lack information on geographic regions. Source: Sveriges Riksbank.

5 Identification of Swedish institutions with the largest foreign exposures The network described in Section 4 suggests an asymmetric distribution of foreign exposures among Swedish banks. To highlight this result, this section identifies the credit institutions in the Swedish banking system that have the largest foreign exposures, as they are likely to primarily transmit risks from abroad. Columns one and two in Table 3 show the five banks with the largest foreign exposures. It is not surprising to see that the three large banks rank at the top since they account for the majority of foreign exposures in the system. As discussed in Section 4, several foreign institutions emerge as important counterparties across all bank categories, indicating a concentration of exposures in the network. This concentration implies that problems in a small number of foreign institutions can simultaneously affect many Swedish banks. To identify these foreign counterparties, we isolate (1) the five largest foreign institutions with the highest number of exposure links from Swedish banks; and (2) the five largest foreign institutions to which Swedish credit institutions have the largest lending exposures. Based on these measures, we obtain a set of six different foreign institutions. Four of the six identified foreign institutions meet both criteria, indicating that they may play a particularly important role for the Swedish banking system. These six foreign counterparties account for approximately half of the Swedish banking system's total large foreign exposures, corresponding to around 222 billion SEK. Five of these institutions are the largest banks or larger mortgage banks in neighboring Nordic countries. The three Swedish large banks also stand out as the three banks with the largest exposures to these institutions, confirming that the largest Swedish banks are central to these cross-border financial linkages and warrant continued monitoring. The above analysis highlights the close connections between Swedish large banks and foreign institutions. Our previous economic commentary (Blix Grimaldi et al. 2026) shows that these banks also tend to channel their exposures within the Swedish banking network. Overall, the results suggest that large banks can play a key role in transmitting external shocks to the Swedish banking system and thus facilitating shock transmission through the domestic banking network.

Table 3: Important Swedish banks with the largest foreign exposures and with the largest exposures to key foreign counterparties

With the largest foreign exposures	With the largest exposures to key foreign counterparties
Rank	Bank	Bank
1	A	A
2	B	B
3	C	C
4	AD	AA
5	AF	AC

Table 4: Identified financial institutions that are important foreign counterparties

Number of exposure links	Volume of exposure amount
Rank	Institution	Institution
1	F053	F053
2	F114	F114
3	F060	F060
4	F120	F120
5	F004	F083
6	F083	F004

6 Conclusions
In this economic commentary, we map and describe the network of cross-border exposures of Swedish credit institutions, based on COREP's data on large exposures. We thereby extend the analysis developed in Blix Grimaldi et al. (2026), where we focused on domestic exposures and highlighted the role of large banks in transmitting shocks through the network. The results indicate that a significant portion of foreign exposures is concentrated in a small number of foreign counterparties, primarily Nordic large banks. The largest Swedish banks emerge as central nodes in the network, reflecting their strong linkages with foreign institutions as well as their importance within the domestic system. Overall, the results suggest that Swedish large banks are central hubs in both domestic and cross-border financial linkages. Their dual roles—as major counterparties to foreign institutions and as domestic intermediaries—mean that they hold a central position in the functioning and stability of the Swedish financial institution network. Problems arising at key foreign counterparties can be transmitted to these banks and subsequently spread through the domestic banking network. This highlights the importance of closely monitoring cross-border exposures and the systemically important role of large banks to safeguard financial stability.

References
Blix Grimaldi, M., Guan Hallquist, L., Li, J., Namér, S., Seim, A., 2026. Kartläggning av sammanlänkningen mellan svenska kreditinstitut – Inhemska exponeringar. Sveriges Riksbank Economic Commentary No. 1 2026.

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