Liquidity surplus has minor effect on short-term interbank rates, Riksbank article finds
Increased liquidity in Swedish banking system linked to downward pressure on interbank rate
The increased liquidity surplus in the Swedish banking system since 2007 has been linked to downward pressure on short-term interbank rates, but the effect is minor as most of the surplus is invested in Riksbank Certificates, according to an article in the latest Riksbank Economic Review.
The article, The banking system's liquidity surplus and interest rate formation, by Virginia Queijo von Heideken and Peter Sellin, analyses the impact of the liquidity surplus in the Swedish banking system on
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