STOCKHOLM May 31 The central bank's foreign
currency reserve is part of Sweden's economic defence and the
government's proposal to reduce the reserve will lead to
increased risk, central bank Deputy Governor Cecilia Skingsley
said on Wednesday.
"Allowing this to happen in a situation where the banking
sector is growing and its dependence on foreign currency is also
increasing is to say the least a risky venture," she said.
Skingsley also said the Swedish banks should manage their
own liquidity risks, securing the sufficient liquidity reserves
and stable funding in foreign currency.
(Reporting by Stockholm Newsroom)