SVERIGES RIKSBANK – ANNUAL REPORT 2014 SVERIGES RIKSBANK – ANNUAL REPORT ANNUAL REPORT 2014 “ The Riksbank is the world’s oldest central bank and our operations must be in keeping with the times and the world around us.” Governor of the Riksbank Stefan Ingves SVERIGES RIKSBANK SE-103 37 Stockholm (Brunkebergstorg) www.riksbank.se Tel: +46 8 787 00 00 Fax: +46 8 21 05 31 SVERIGES RIKSBANK △ Wall clock from the 1770s. The △ The Riksbank uses a digital clock workings bear the signatures of two when monetary policy transactions of Stockholm’s foremost clockmakers are executed. of the period, Nils Berg and Swiss- born Augustin Bourdillon. ▽ Grandfather clock, Rococo, 18th ▽ Grandfather clock, straight, Late century. The workings bear the signa- Baroque type. The workings bear the ture of Petter Ernst, who was active signature of Vincent Schultz, who 1750–1784. was active in Stockholm until 1759. Sveriges Riksbank is the world’s oldest central bank, and was founded in 1668. The bank owns several old wall clocks and grandfather clocks that it received as pledges or collateral when borrowers were unable to repay their debts. These clocks date from the Design and production: Intellecta Corporate To order the publication, please contact days when the Riksbank lent money to companies and the general public. Sveriges Riksbank, Kontorsservicecenter, Photo: Cover, pages 2, 5, 11, 15, SE-103 37 Stockholm, fax: +46 8 21 05 31, 16, 38, 42, 80: Sandra Birgersdotter, email: [email protected] pages 6 and 20: Petter Karlberg, or website: www.riksbank.se page 25: Jennifer Nemie, page 54: Emma Holmgren ISSN 0347-5042 Printed by: TMG Sthlm Stockholm 2015 Contents THE GENERAL COUNCIL’S ANNUAL REPORT AND PROPOSAL FOR ALLOCATION OF THE RIKSBANK’S PROFIT FOR 2014 Annual Report of the General Council 4 Proposal for the allocation of profits for 2014 7 Calculation of the Riksbank’s allocation of profit for 2014 8 ANNUAL REPORT FOR SVERIGES RIKSBANK 2014 INTRODUCTION Statement by the Governor 10 The year at a glance 12 ADMINISTRATION REPORT The tasks and role of the Riksbank 14 Organisation and management 18 Maintaining the value of money – price stability 26 A safe and efficient payment system 34 Asset management 46 BALANCE SHEET AND PROFIT AND LOSS ACCOUNT Accounting policies 55 Balance sheet 57 Profit and loss account 59 Cash flow statement 60 Notes 62 The profit and loss account and balance sheet by function 70 Five-year overview 72 INTERNAL CONTROL 74 AUDITOR’S REPORT FOR SVERIGES RIKSBANK 2014 75 APPENDICES 1. The departments of the Riksbank and their tasks 77 2. Consulation work of the Riksbank 78 3. Publications 79 4. The Sveriges Riksbank Prize in Economic Sciences in memory of Alfred Nobel 2014 80 5. Glossary 81 SVERIGES RIKSBANK – ANNUAL REPORT 2014 3 Annual report of the General Council Under Chapter 10, Section 3 of the Sveriges Riksbank Act The General Council’s tasks (1988:1385), the General Council shall present proposals to the Riksdag (the Swedish Parliament) and the Swedish National The General Council has the task of monitoring and controlling Audit Office regarding the allocation of the Riksbank’s profits. how the Riksbank conducts its activities and how the members of the Executive Board manage its business. One of the ways For several years, the General Council has applied a principle the General Council can perform its supervisory role is through the Chairperson and Vice Chairperson attending the Executive for calculation that can be expressed in brief by stating that 80 Board meetings. The Chairperson and Vice Chairperson also per cent of the past five years’ average profit shall be trans- have the right to speak at the Executive Board’s meetings, but ferred to the Treasury. The profit is calculated excluding they do not have the right to vote or make proposals. The exchange rate and gold value effects, but including the price General Council also has an audit function whose work is car- effects reported in the revaluation account on the balance ried out by an external accounting firm under the leadership of sheet. For 2014 the General Council therefore proposes a an authorised public accountant. transfer of SEK 4 100 million. The General Council appoints the members of the Executive Board and decides on their salaries and other terms of employ- The General Council’s account of activities for 2014 reports ment. It also adopts the Riksbank’s Rules of Procedure and that the Council has met on 14 occasions during the year and decides on the design of banknotes and coins. gives an overall description of the matters discussed and the Furthermore, the General Council submits proposals to the information the General Council has received at its meetings. Riksdag concerning the allocation of the Riksbank’s profits and The Council’s report also describes how it has conducted its makes a recommendation to the Riksdag with regard to the dis- controlling function. charge from liability of the members of the Executive Board. The General Council consists of eleven members and as many The General Council submits consultation responses within its deputies. The members are appointed by the Riksdag after each field of competence and the Executive Board consults with the general election, for a term of office of four years. The General General Council on proposals to the Riksdag and the Council then selects from among its members a Chairperson Government regarding government amendments to statutes or and a Vice Chairperson. other central government measures. Until 13 October 2014, the members of the General Council The Chairperson and Vice Chairperson submit a report on the were Johan Gernandt (Chairperson), Sven-Erik Österberg General Council’s work to the Riksdag Committee on Finance. (as of 31 May 2011, Vice Chairperson as of 22 June 2011), This usually takes place twice a year. Peter Egardt, Sonia Karlsson, Bertil Kjellberg, Anders Karlsson, Gun Hellsvik, Lena Sommestad, Allan Widman, Peter Eriksson and Roger Tiefensee (as of 14 October 2011). During the The General Council’s activities in 2014 same period, deputy members were Hans Birger Ekström, During the year, the General Council held fourteen meetings. Tommy Waidelich (as of 23 March 2012), Ulf Sjösten, Ann-Kristine Johansson, Chris Heister, Bosse Ringholm, The General Council made decisions during the year on the Per Landgren (as of 25 August 2011), Catharina Bråkenhielm, terms of employment and external assignments of the members Gunnar Andrén (as of 1 March 2014), Agneta Börjesson of the Executive Board. (as of 16 December 2011) and Håkan Larsson. As of 14 October 2014, the General Council consists of Members of the Executive Board the following members: Susanne Eberstein (Chairperson), At its meeting on 6 October, the General Council decided to Michael Lundholm (Vice Chairperson), Hans Hoff, discharge Karolina Ekholm from her position as Member of the Peter Egardt, Caroline Helmersson Olsson, Martin Kinnunen Executive Board. (as of 23 October), Hans Birger Ekström, Anders Karlsson, On 19 December, the General Council decided to appoint Roger Tiefensee, Agneta Börjesson and Chris Heister. Henry Ohlsson as new Deputy Governor and member of the The deputy members are Catharina Bråkenhielm, Executive Board for a term of office of six years as of 12 Elisabeth Björnsdotter Rahm, Tommy Waidelich, Oskar Öholm, January 2015. Ann-Kristine Johansson, Olle Felten (as of 23 October), Carl B Hamilton, ClasGöran Carlsson, Karin Nilsson, Esabelle Dingizian (as of 2 December) and Stefan Attefall. 4 SVERIGES RIKSBANK – ANNUAL REPORT 2014 The General Council of the Riksbank’s Vice Chairperson Michael Lundholm and Chairperson Susanne Eberstein Banknotes and coins Riksbankens Jubileumsfond Four members of the General Council and four external experts At its meeting in August, the General Council decided to pro- formed the Drafting Committee for the design of banknotes and pose to the Riksdag that it appoint Kerstin Hessius as member of coins. The group was headed by General Council member Peter the Board of Directors of the foundation Riksbankens Egardt. The other group members from the General Council Jubileumsfond. The Riksdag resolved in accordance with the were Allan Widman, Sonia Karlsson and Anders Karlsson. The General Council’s proposal on 24 October. experts in the group were the State Herald of Sweden, the head of the Royal Coin Cabinet at the National Museum of Economy, Communications to the Riksdag one representative of the National Museum of Fine Arts and one representative of the Royal Swedish Academy of Fine Arts. The Over the year, the Executive Board has consulted with the group’s assignment was to draft questions on the graphic and General Council on a submission to the Riksdag on certain artistic design of banknotes and coins, as well as questions banknotes and coins ceasing to be legal tender. regarding proposals on and the design of any commemorative or special circulation coins. At the group’s meeting in May, it was Follow-up of the work of the Executive Board noted that the group would probably not have to convene again Part of the General Council’s control was exercised in that the until 2017 at earliest. Chairperson and Vice Chairperson of the General Council Over the year, the General Council received regular information followed the work of the Executive Board during the year, for on the current work on the new Swedish banknote and coin series example by attending the meetings of the Executive Board and and on the withdrawal of the 50- and 1 000-krona banknotes a number of informal meetings. without foil strip that have been invalid since the start of the year. The members of the Executive Board normally participated in the General Council meetings and regularly contributed Rules of procedure accounts of important decisions and events in the Riksbank’s At its meeting in February, the General Council decided to make activities.