financial stability report 2006:1 may 31, 2006. chapter 1 financial markets
TRANSCRIPT
Financial Stability Report2006:1
May 31, 2006
CHAPTER 1Financial markets
Stock markets in selected countries
Index: september 2002 = 100
Figure 1:1 Source: Reuters EcoWin
0
50
100
150
200
250
300
350
Jun
-92
Jun
-94
Jun
-96
Jun
-98
Jun
-00
Jun
-02
Jun
-04
Jun
-06
Sweden - OMX Germany - DAX 100
UK - FTSE 100 USA - S&P 500
P/E ratios for Sweden, Europe and the United States
Figure 1:2 Source: Reuters EcoWin
0
5
10
15
20
25
30
35
40
De
c-9
3
De
c-9
4
De
c-9
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De
c-9
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De
c-9
7
De
c-9
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De
c-9
9
De
c-0
0
De
c-0
1
De
c-0
2
De
c-0
3
De
c-0
4
De
c-0
5
De
c-0
6
Sweden - OMX Europe - Stoxx USA - S&P 500
Implied stock-market volatility
Index
Figure 1:3 Source: Bloomberg
0
10
20
30
40
50
60
jun-96 jun-97 jun-98 jun-99 jun-00 jun-01 jun-02 jun-03 jun-04 jun-05 jun-06
0
10
20
30
40
50
60
Sweden - OMX UK - FTSE 100
Germany - DAX 30 USA - S&P 500
Historical stock-market volatility in
Sweden and the United States
Figure 1:4 Source: Reuters EcoWin
0.0
0.1
0.2
0.3
0.4
Jan
-55
Jan
-60
Jan
-65
Jan
-70
Jan
-75
Jan
-80
Jan
-85
Jan
-90
Jan
-95
Jan
-00
Jan
-05
Jan
-10
Sweden - AFGX USA - S&P 500
Ten-year government bond ratesPer cent
Figure 1:5 Source: Reuters EcoWin
0
2
4
6
8
10
12
14
Jun-90 Jun-92 Jun-94 Jun-96 Jun-98 Jun-00 Jun-02 Jun-04 Jun-06
Sweden Germany UK USA
Credit spreads in the United States
Percentage points
Figure 1:6 Sources: Reuters EcoWin, Federal Reserve Board and Merrill Lynch
0
2
4
6
8
10
12
Jun-98 Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06
High grade (Aaa) Low grade (Baa) High-yield bonds
Corporate bond spreads in Europe
Percentage points
Figure 1:7 Source: Reuters EcoWin
0
3
6
9
12
15
18
1999 2000 2001 2002 2003 2004 2005 2006
Low grade (BBB) High-yield bonds
Credit default swap spreadar
Figure 1:8 Source: Bloomberg
20
30
40
50
60
70
80
Ma
r-0
5
Ap
r-0
5
Ma
y-0
5
Jun
-05
Jul-
05
Au
g-0
5
Se
p-0
5
Oct
-05
No
v-0
5
De
c-0
5
Jan
-06
Fe
b-0
6
Ma
r-0
6
Ap
r-0
6
Europe North America
Spreads for bonds issued by emerging market economies
Percentage points
Figure 1:9 Source: Bloomberg
0
4
8
12
16
20
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06
Europe EMBI+ Asia
Oil price and commodity price index
USD per barrel and index: February 2002=100
Figure 1:10 Sources: The Economist and Reuters EcoWin
10
20
30
40
50
60
70
80
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06
60
80
100
120
140
160
180
200
Oil price (left scale) Commodity price index (right scale)
Nominal house pricesTwelve-month change, per cent
Figure B1 Sources: Reuters EcoWin and Australian Property Monitor
-10
0
10
20
30
40
Ma
r-9
0
Ma
r-9
2
Ma
r-9
4
Ma
r-9
6
Ma
r-9
8
Ma
r-0
0
Ma
r-0
2
Ma
r-0
4
Ma
r-0
6
USA Australia UK Ireland Netherlands
Nominal house pricesTwelve-month change, per cent
Figure B2 Source: Reuters EcoWin
-20
-10
0
10
20
30
Ma
r-9
0
Ma
r-9
2
Ma
r-9
4
Ma
r-9
6
Ma
r-9
8
Ma
r-0
0
Ma
r-0
2
Ma
r-0
4
Ma
r-0
6
Sweden Denmark Spain Norway
US households’ ability to service house purchases
Index
Figure B3 Source: Reuters EcoWin
100
110
120
130
140
150
Jan-90 Jan-92 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06
CHAPTER 2The Swedish banks’
borrowers
Non-financial companies, borrowing and bank depositsPercentage twelve-month change, three-month
moving average
Figure 2:1
-10
0
10
20
30
De
c 9
1
De
c 9
2
De
c 9
3
De
c 9
4
De
c 9
5
De
c 9
6
De
c 9
7
De
c 9
8
De
c 9
9
De
c 0
0
De
c 0
1
De
c 0
2
De
c 0
3
De
c 0
4
De
c 0
5
De
c 0
6
Bank deposits Borrowing from credit market institutions
Source: The Riksbank
Non-financial companies, borrowing from securities markets and credit
market institutionsMiljarder kronor
Figure 2:2 Source: The Riksbank
0
300
600
900
1200
1500
18001
99
0
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
Credit market institutions Bond and certificates
Corporate sector gross fixed capital formation and borrowing by non-financial
companies from credit market institutions
Percentage twelve-month change, four-month moving average
Figure 2:3 Sources: Statistics Sweden and the Riksbank
-10
-5
0
5
10
15
20
De
c-9
5
De
c-9
6
De
c-9
7
De
c-9
8
De
c-9
9
De
c-0
0
De
c-0
1
De
c-0
2
De
c-0
3
De
c-0
4
De
c-0
5
Gross fixed capital formation Borrowing from credit market institutions
Ratio of debt to total assets in listed companiesPer cent of all listed companies
Figure 2:4 Sources: Bloomberg and the Riksbank
0
20
40
60
80
100
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
0-25 25-50 50-75 >75 Average
Returns on equity in listed companies
Per cent of all listed companies
Figure 2:5 Sources: Bloomberg and the Riksbank
0
20
40
60
80
100
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005sep
>10 5 - 10 0 - 5 -5 - 0 <- 5Return on
equity:
Number of corporate defaults by company size
Figure 2:6 Source: Statistics Sweden
0
100
200
300
400
500
600
De
c-8
2
De
c-8
4
De
c-8
6
De
c-8
8
De
c-9
0
De
c-9
2
De
c-9
4
De
c-9
6
De
c-9
8
De
c-0
0
De
c-0
2
De
c-0
4
De
c-0
6
0
5
10
15
20
25
30
1–9 employees 10–49 employees >49 employees (right scale)
Expected default frequency (EDF) by industry
for listed non-financial companiesPer cent (logarithmic scale)
Figure 2:7 Source: Moody’s KMV
0.01
0.1
1
10
100
Apr-01 Apr-02 Apr-03 Apr-04 Apr-05 Apr-06
Manufacturing Construction IT-telecom
Services Property management Transport
Expected default frequency (EDF) for listed non-financial companies in Nordic
countries and GermanyPer cent (logarithmic scale)
Figure 2:8 Source: Moody’s KMV
0.01
0.1
1
10
Apr-01 Apr-02 Apr-03 Apr-04 Apr-05 Apr-06
Sweden Norway Denmark Finland Germany
Company acquisitions
Figure B4 Sources: Swedish Venture Capital Association (SVCA) and the company Förvärv och Fusioner
0
200
400
600
800
1000
1200
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Total no. of Swedish acquisitionsLeveraged buyouts by private equity companies in Sweden
Leveraged buyout investmentsSEK billion and number
Figure B5 Sources: Swedish Venture Capital Association (SVCA)
0
10
20
30
40
2001 2002 2003 2004 2005
0
25
50
75
100
Amount invested (left scale) Number of investments (right scale)
EBIT multiples for leveraged buyouts
Average in SEK million
Figure B6 Source: The Centre for Management Buy Out Research
0
5
10
15
20
25
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Swedish private equity companies Average for Europe
EBIT multiples for Swedish equity companies’ acquisitions
abroadAverage in SEK million
Figure B7 Source: The Centre for Management Buy Out Research
0
10
20
30
40
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Swedish private equity companies Average for Europe
Interest-expenditure and debt ratios
for listed property companies
Figure 2:9 Sources: Financial statements and the Riksbank
0
1
2
3
4
1997 1998 1999 2000 2001 2002 2003 2004 2005
0
1
2
3
4
5
Debt ratio Interest ratio
Expected default frequency (EDF) for listed property companies in Nordic
countries and GermanyPer cent (logarithmic scale)
Figure 2:10 Source: Moody´s KMV
0.01
0.1
1
10
Ap
r-0
1
Ap
r-0
2
Ap
r-0
3
Ap
r-0
4
Ap
r-0
5
Ap
r-0
6
Sweden Norway Denmark Finland Germany
Vacancy rates for office premises
in central locationsPer cent
Figure B8
0
10
20
30
De
c 9
0
De
c 9
2
De
c 9
4
De
c 9
6
De
c 9
8
De
c 0
0
De
c 0
2
De
c 0
4
De
c 0
6
Stockholm Göteborg Malmö
Sources: NewSec AB and the Riksbank
Real rents for office premises in central locations
Index 1981 = 100
Figure B9 Sources: NewSec AB and the Riksbank
50
100
150
200
de
c 8
1
de
c 8
6
de
c 9
1
de
c 9
6
de
c 0
1
de
c 0
6
Stockholm Göteborg Malmö
Real prices for office premises in central locations
Index 1981 = 100
Figure B10 Sources: Newsec AB, Jones Lang LaSalle and Reuters EcoWin
0
100
200
300
400
500
de
c-8
1
de
c-8
6
de
c-9
1
de
c-9
6
de
c-0
1
de
c-0
6
Stockholm Göteborg Malmö
Average direct return required for
office premises in central locations
Per cent
Figure B11 Sources: Newsec AB and Reuters EcoWin
0
2
4
6
8
10
12
14
De
c 8
0
De
c 8
2
De
c 8
4
De
c 8
6
De
c 8
8
De
c 9
0
De
c 9
2
De
c 9
4
De
c 9
6
De
c 9
8
De
c 0
0
De
c 0
2
De
c 0
4
De
c 0
6
Stockholm Göteborg Malmö 5-year treasury bond rate
Household borrowing by type of institutionPercentage 12-month change
Figure 2:11 Source: The Riksbank
-10
0
10
20
Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06
Total Mortage institutions
Household debt and post-tax interest expenditure in relation to
disposable incomePer cent
Figure 2:12 Sources: Statistics Sweden and The Riksbank
0
40
80
120
160
1970 1974 1978 1982 1986 1990 1994 1998 2002 2006
0
4
8
12
16
Debt ratio (left scale) Post-tax interest expenditure ratio (right scale)
Duration of fixed interest periods
for house mortgage loansPer cent of total stock
Figure 2:13 Source: The Riksbank
0%
20%
40%
60%
80%
100%
Jan-
97
Jan-
98
Jan-
99
Jan-
00
Jan-
01
Jan-
02
Jan-
03
Jan-
04
Jan-
05
Jan-
06
Variable rate Fixed >3 months to 5 years Fixed >5 years
Household debt and house prices
Index: 1986 = 100
Source: Statistics SwedenFigure 2:14
0
100
200
300
400
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005
0
100
200
300
400
House prices Household debt
House pricesIndex 1986 = 100
Figure 2:15 Source: Statistics Sweden
0
100
200
300
400
500
600
Ma
r-8
6
Ma
r-8
8
Ma
r-9
0
Ma
r-9
2
Ma
r-9
4
Ma
r-9
6
Ma
r-9
8
Ma
r-0
0
Ma
r-0
2
Ma
r-0
4
Ma
r-0
6
Greater Stockholm Greater GothenburgGreater Malmö National average
Completed new residential construction,
by type of housingNumber of dwelling units
Figure 2:16 Source: Statistics Sweden
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
75 80 85 90 95 00 05
Apartment buildings 1- and 2-family houses
National average price of tenant owned dwellings
SEK per square metre
Figure 2:17 Source: maklarstatistik.se
0
3 000
6 000
9 000
12 000
15 000
18 000
dec-
95
dec-
96
dec-
97
dec-
98
dec-
99
dec-
00
dec-
01
dec-
02
dec-
03
dec-
04
dec-
05
dec-
06
Debt and interest expenditure ratios
for indebted householdsPer cent
Figure B12 Sources: Statistics Sweden and the Riksbank
110
120
130
140
150
160
170
180
1999 2000 2001 2002 2003 2004
0
2
4
6
8
10
12
14
Debt ratio (left scale) Post-tax interest expenditure ratio (right scale)
Debt and interest expenditure ratios,
by income decilesPer cent
Figure B13 Sources: Statistics Sweden and the Riksbank
0
50
100
150
200
250
300
3 4 5 6 7 8 9 10
0
1
2
3
4
5
6
Interest ratio (right scale) Debt ratio (left scale)
Share of household sector debt and proportion
of households below the margin, by income deciles
Per cent
Figure B14 Sources: Statistics Sweden and the Riksbank
0
10
20
30
40
3 4 5 6 7 8 9 10
0
2
4
6
8
Share of total debt (left scale) Proportion of households below the margin (right scale)
Shares of household sector debt and assets, by income deciles
Per cent
Figure B15 Sources: Statistics Sweden and the Riksbank
0
10
20
30
40
3 4 5 6 7 8 9 10
Share of household sector debt Share of household sector assets
CHAPTER 3Developments in
the banking
Geographical breakdown of operating profits for 2005
Per cent
Figure 3:1 Sources: Banks reports and the Riksbank
0
20
40
60
80
100
Handelsbanken Förenings-sparbanken
SEB Nordea
Sweden Other Nordic countries Poland and Baltic states Germany Other countries
Implied volatility of bank equity
Per cent, moving 10-day average
Figure 3:2 Sources: Bloomberg and the Riksbank
0
40
80
120
Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06
0
40
80
120
SEB Handelsbanken Nordea Föreningssparbanken
Pre-tax return on equityPer cent
Figure 3:3 Sources: Banks reports and the Riksbank
-20
0
20
40
60
80
Pre-tax profit margin Riskadjusted income Level of risk Leverage
Profit before loan losses and net
loan losses in the major banksFour-quarter figures, SEK billion, 2006 prices
Figure 3:4 Sources: Banks reports and the Riksbank
0
20
40
60
80
100
De
c-9
0
De
c-9
2
De
c-9
4
De
c-9
6
De
c-9
8
De
c-0
0
De
c-0
2
De
c-0
4
De
c-0
6
0
20
40
60
80
100
Profit before loan losses Profit before loan losses using IFRS Loan losses
The major Swedish banks’ profits
Four-quarter figures, SEK billion
Figure 3:5 Sources: Banks reports and the Riksbank
-20
0
20
40
60
80
Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06
Capital gains/losses and pension provisionsProfit on other operationsFinancial transactions/operations at market valuesCore profits
The major banks’ securities-related commission income, Stockholm Stock
Exchange turnover and a Nordic stock-market index
SEK million and index: 1997=100
Figure 3:6 Sources: Bank reports, Reuters EcoWin and the Riksbank
0
1,000
2,000
3,000
4,000
5,000
03:1 03:2 03:3 03:4 04:1 04:2 04:3 04:4 05:1 05:2 05:3 05:4 06:1
0
100
200
300
400
500
Brokerage incomeCapital management incomeOther securities-related incomeStockholm Stock Exchange turnover (index, right scale)Nordic stock-market index (right scale)
Post-tax return on equityPer cent
Figure 3:7 Sources: Banks reports and the Riksbank
0
10
20
30
2000 2001 2002 2003 2004 2005 2006
SEB HandelsbankenNordea FöreningssparbankenDanske Bank Jyske BankOP Bank Group DNB NOR
Breakdown of the major banks income
Per cent
Figure B15 Sources: Banks reports and the Riksbank
0
20
40
60
80
100
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06
Other incomeNet transactions income/operations are market valuesNet commission incomeNet interest income
Net interest margin and spreads for the major banks on deposits, bank loans and
mortgage loansPer cent, moving 4-quarter average
Figure B16 Sources: Banks reports and the Riksbank
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06
Net interest margin Bank loans
New mortgage loans Bank deposits
Cost efficiency of the major banksPer cent
Figure B17 Sources: Banks reports and the Riksbank
0
1
2
3
4
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
0
20
40
60
80
Costs/assets Income/ assets
C/I ratio (right scale) C/I ratio with IFRS (right scale)
Figure B18 Sources: Banks reports and the Riksbank
Cost/income ratiosPer cent
20
30
40
50
60
70
80
90
2000 2001 2002 2003 2004 2005 2006
SEB Handelsbanken Nordea
Föreningssparbanken Danske Bank Jyske Bank
OP Bank Group DNB NOR
Stock of loans to the general public,
sector breakdown and share of growth
Per cent
Figure 3:8 Sources: Banks reports and the Riksbank
0
10
20
30
40H
ouse
mor
tgag
es
Oth
er lo
ans
toho
useh
olds
Rea
l-est
ate
man
agem
ent
Tra
de &
serv
ices
Tra
nspo
rt &
ship
ping
Con
stru
ctio
n
Man
ufac
turin
g
Oth
er
Pub
licad
min
istr
atio
n
Share of total lending Share of total increase 2004–2005
Lending by credit institutions to companies in Sweden
Percentage 12-month change, three-month moving average
Figure 3:9
-20
-10
0
10
20
dec-97 dec-98 dec-99 dec-00 dec-01 dec-02 dec-03 dec-04 dec-05 dec-06
-20
-10
0
10
20
SEB Handelsbanken Nordea Föreningssparbanken
Source: The Riksbank
Lending by credit institutionsto households in Sweden
Percentage 12-month change
Figure 3:10
-5
0
5
10
15
20
dec-97 dec-98 dec-99 dec-00 dec-01 dec-02 dec-03 dec-04 dec-05 dec-06
-5
0
5
10
15
20
SEB Handelsbanken Nordea Föreningssparbanken
Source: The Riksbank
Lending to the public in Sweden and abroad
Index: 2005 Q1 = 100
Sources: Banks reports and the RiksbankFigure 3:11
80
90
100
110
120
130
140
150
05
:1
05
:2
05
:3
05
:4
06
:1
05
:1
05
:2
05
:3
05
:4
06
:1
05
:1
05
:2
05
:3
05
:4
06
:1
05
:1
05
:2
05
:3
05
:4
06
:1
Total In Sweden Abroad
Förenings-sparbanken
Handels-banken
Nordea SEB
Provisions for incurred and probable loan losses
Per cent of loan stock, accumulated over four quarters
Figure 3:12 Sources: Banks reports and the Riksbank
0,0
0,4
0,8
1,2
1,6
dec-95 dec-96 dec-97 dec-98 dec-99 dec-00 dec-01 dec-02 dec-03 dec-04 dec-05 dec-06
0,0
0,4
0,8
1,2
1,6
SEB Handelsbanken Nordea Föreningssparbanken
Loan losses, netPer cent of loan stock
Figure 3:13 Sources: Banks reports and the Riksbank
-0,1
0,0
0,1
0,2
0,3
0,4
0,5S
EB
För
enin
gs-
spar
bank
en
OP
Ban
kG
roup
DN
B N
OR
Jysk
e B
ank
Nor
dea
Han
dels
-ba
nken
Dan
ske
Ban
k
2003 2004 2005 2006
Tier 1 capital ratios of the four major Swedish banks
Per cent
Figure 3:14
4
6
8
10
12
dec-96 dec-97 dec-98 dec-99 dec-00 dec-01 dec-02 dec-03 dec-04 dec-05 dec-06
4
6
8
10
12
SEB Handelsbanken Nordea Föreningssparbanken
Sources: Banks reports and the Riksbank
Tier 1 capital ratios of the major Nordic banks
Per cent
Figure 3:15
4
6
8
10
12
14
16
2000 2001 2002 2003 2004 2005 mars 2006SEB Handelsbanken Nordea
Föreningssparbanken Jyske Bank Danske Bank
DNB NOR OP Bank Group
Sources: Banks reports and the Riksbank
The major Swedish banks’ deposits,
lending and funding gapSEK billion and per cent
Figure 3:16 Sources: Banks reports and the Riksbank
0
1,000
2,000
3,000
4,000
5,000
Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06
0
20
40
60
80
100
Lending (left scale) Deposits (left scale) Funding gap (right scale)
The major Swedish banks’ interest-bearing assets and liabilities,
December 2005SEK billion
Figure 3:17 Sources: Banks reports and the Riksbank
-600
-400
-200
0
200
400
600
SE
K
EU
R
US
D
Oth
er
SE
K
EU
R
US
D
Oth
er
SE
K
EU
R
US
D
Oth
er
SE
K
EU
R
US
D
Oth
er
Lending, net Securities Interbank, net Issued securities Other, net
Handelsbanken Förenings-sparbanken
Nordea SEB
Tier 1 capital ratios in the four major Swedish
banks after one of them has defaultedPer cent. Recovery 25 per cent
Figure 3:18 Source: The Riksbank
0
2
4
6
8
10
12
04:3
04:4
05:1
05:2
05:3
05:4
04:3
04:4
05:1
05:2
05:3
05:4
04:3
04:4
05:1
05:2
05:3
05:4
04:3
04:4
05:1
05:2
05:3
05:4
Bank D failsBank B fails Bank C failsBank A fails
I Range in the period 1999 Q3 – 2005 Q4
ARTICLE 1Using external information
to measure credit risk
Lending, geographical breakdown
Per cent
Figure B1 Sources: The banks’ annual reports and the Riksbank
0
20
40
60
80
Sw
ed
en
De
nm
ark
No
rwa
y
Fin
lan
d
Oth
er
No
rdic
cou
ntr
ies
Ba
ltic
cou
ntr
ies
Ge
rma
ny
Un
ited
Kin
gd
om
Re
st o
f th
ew
orld
Em
erg
ing
ma
rke
ts
SEB Nordea Föreningssparbanken Handelsbanken
Lending, sector breakdownPer cent
Figure B2 Sources: The banks’ annual reports and the Riksbank
0
10
20
30
40
50
Householdlending
Corporate lending(excl. Propertymanagement)
Propertymanagement
Public sectormanagement
Credit institutions
SEB Handelsbanken Nordea Föreningssparbanken
Corporate lending, industry breakdown
Per cent
Figure B3 Sources: The banks’ annual reports and the Riksbank
0
10
20
30
40
50F
ina
nce
and
insu
ranc
e
Re
tail
and
serv
ice
s
Tra
nsp
ort
Oth
er
serv
ice
oper
atio
ns
Co
nstr
uctio
nin
dust
ry
Ma
nuf
actu
ring
indu
stry
Agr
icul
ture
and
fish
ing
Re
tail,
hot
elan
dre
sta
ura
nt
Oth
er
SEB Handelsbanken Nordea Föreningssparbanken
Expected loss as a percentage of the
bank’s credit portfolioPer cent
Figure 1 Source: The Riksbank
0,0
0,1
0,2
0,3
0,4
2001 2002 2003 2004 2005 2006
SEB Handelsbanken Nordea Föreningssparbanken
Figure 2
1
2
3
4
2001 2002 2003 2004 2005 2006
SEB Handelsbanken Nordea Föreningssparbanken
Risk capital requirement as a percentage of the bank’s credit
portfolioPer cent
Source: The Riksbank
Expected loss and risk capital requirement as
a percentage of the bank’s credit portfolio
Figure 3 Source: The Riksbank
0
1
2
3
4
0.0 0.1 0.2 0.3 0.4
Expected loss/portfolio size
Ris
k ca
pita
l re
qu
ire
me
nt/
po
rtfo
lio s
ize
SEB
Förenings-sparbanken
Handelsbanken
Nordea
Risk capital and Tier 1 capital
in the banksPer cent
Figure 4 Source: The Riksbank
0
1
2
3
4
5
6
7
8
Ris
k ca
pita
l/po
rtfo
lio s
ize
Tie
r 1
capi
tal/
port
folio
siz
e
Ris
k ca
pita
l/po
rtfo
lio s
ize
Tie
r 1
capi
tal/
port
folio
siz
e
Ris
k ca
pita
l/po
rtfo
lio s
ize
Tie
r 1
capi
tal/
port
folio
siz
e
Ris
k ca
pita
l/po
rtfo
lio s
ize
Tie
r 1
capi
tal/
port
folio
siz
e
SEB SHB FSB Nordea
2002 2003 2004 2005
Income breakdown in the four major banks
Per cent
Figure 5 Sources: The banks’ annual reports and the Riksbank
0%
20%
40%
60%
80%
100%
Föreningssparbanken Handelsbanken Nordea SEB
Net interest income Net commission income Actual value of operations
Other bank income Associated companies, etc
ARTICLE 2Hedge funds and the
financial system
Market index
Source: Reuters EcowinFigure 1
0
100
200
300
400
jan-
94
jan-
95
jan-
96
jan-
97
jan-
98
jan-
99
jan-
00
jan-
01
jan-
02
jan-
03
jan-
04
jan-
05
jan-
06
Standard & Poors Hedgefund index Msci World
Number of hedge funds registered in Sweden and the percentage of
capital managedPer cent
Source: Fondbolagens förening
Figure 2
0
10
20
30
40
50
60
Jun
-01
De
c-0
1
Jun
-02
De
c-0
2
Jun
-03
De
c-0
3
Jun
-04
De
c-0
4
Jun
-05
De
c-0
5
1
2
3
4
5
6
7
Number of funds (left scale) Percentage of capital managed (right scale)
Nordic Hedge fund index (NHX) Sweden
and the Affärsvärlden general index
Source: Hedgenordic
Figure 3
0
40
80
120
160
Jan-02 Jan-03 Jan-04 Jan-05 Jan-06
NHX Sweden AFGX