Riksbank's Persson: Making the European financial system safer

Regulators and politicians know what needs to be done to put the eurozone on an even keel and fix the holes exposed by the subprime crisis, says Mattias Persson, head of financial stability at the Sveriges Riksbank, Sweden’s central bank. The result will be a safer financial system – but it won’t be free of cost. By Duncan Wood

At the start of the 1990s, the Swedish banking system was brought to its knees by bad real estate loans. But the memories of that crisis helped protect Sweden when US subprime mortgage risk threatened to choke the global financial system – so says Mattias Persson, head of financial stability at the Riksbank, Sweden’s central bank.

During the crisis, domestic authorities co-operated, banks were exposed to severe stress tests, the results were made public and the industry was quickly shored up