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Riksbank Governor Stefan Ingves on Tuesday called for stricter regulation and supervision of banks to prevent a repeat of the global credit crunch.
Speaking before the parliamentary finance committee in Stockholm, Ingves said: "One lesson learned from both the global crisis and that in the Baltic countries is that the regulation and supervision of the financial sector must be strengthened.
"This entails, for instance, more and better capital in the banks, stricter requirements regarding banks' liquidity and risk management in general, as well as stricter supervision of large, cross-border groups."
The central bank chief was speaking about the role of the Riksbank in the financial crisis that engulfed the Baltic states of Latvia, Lithuania and Estonia. The crisis cost two major Swedish banks, SEB and Swedbank, an estimated SEK 27 billion in loan losses during 2009.
Ingves defended the central bank's measures to stabilize the situation among the major Swedish banks in the Baltic front and added that it had avoided any loss of Swedish taxpayers' money.
"When banks make losses abroad, they do not have the possibilities to provide loans in Sweden, and thus our country may have poorer economic development," he said. "The Riksbank has done all it can to prevent such a negative development."
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