The Riksbank's right to demand interest-free deposits (deposit requirement)

The Riksbank’s financial liabilities mostly consist of the banking system’s claims in Swedish krona on the Riksbank. These liabilities are mainly a result of the Riksbank borrowing Swedish kronor from the banking system to finance its Swedish and foreign securities. The loans are made by the Riksbank offering its monetary policy counterparties the opportunity to place funds in an account at the Riksbank overnight, in a standing deposit facility. We also offer them the opportunity to buy Riksbank Certificates with a one-week maturity. In both cases, the Riksbank pays interest on the placements.

The deposit requirement means that monetary policy counterparties and other banks and credit institutions do not receive any interest when they place funds at the Riksbank. This reduces the Riksbank's interest costs and thus contributes to improved earnings.

Interest-free deposits and the Riksbank's financial independence

The basis for the Riksbank's financial independence is that it has access to cost-free capital, such as banknotes and coins and equity, which is then invested in interest-bearing assets. The return on these assets is intended to cover the bank's administrative costs.

In Sweden, cash is used to a lesser extent than in many other countries, which limits this source of funding and means that the Riksbank needs to fund its assets in other ways instead. As a rule, this funding entails an interest cost, which weakens the Riksbank's earning capacity. Interest-free deposits provide the Riksbank with an alternative source of funding that is independent of the use of cash.

According to the Sveriges Riksbank Act, the Riksbank may decide on interest-free deposits if the Riksbank's equity falls below the so-called target level. For 2025, according to the Riksbank's annual report, equity amounts to SEK 23.0 billion, and the target level to SEK 63.1 billion. The maximum amount of the interest-free deposits is updated every year, after the Riksdag has adopted the Riksbank's profit and loss statement and balance sheet. As the Riksbank makes profits and builds up its equity, both the need and the scope for interest-free deposits will decrease.

Riksbank can require interest-free deposits from credit institutions in Sweden

If the Riksbank decides on interest-free deposits, this means that all credit institutions operating in Sweden will have deposits at the Riksbank without receiving interest. This applies to both Swedish credit institutions, such as banks, and branches of foreign credit institutions.

Size of credit institutions' deposits

The amount of deposits each credit institution must have at the Riksbank without receiving interest depends on its so-called deposit base. A credit institution's deposit base consists of its deposits and issued debt securities, with some exceptions. All credit institutions must hold a certain proportion of their deposit base as interest-free deposits at the Riksbank. Deposits will thus be proportional to the size of the institution, which means that the largest credit institutions in Sweden will contribute the most interest-free funding to the Riksbank. The amount of non-interest-bearing deposits to be held by each institution will be determined on the basis of the deposit base at each year-end.