Riksbank Borrowing Capacity Test: What Banks Must Verify About Central Bank Liquidity Access

ByOfficer

Last updated: June 2026

A bank can meet the liquidity coverage ratio every month and still be unable to draw central bank cash quickly when liquidity stress starts. Closing that gap is the whole point of the Riksbank borrowing capacity test. Drawing on a buffer through a central bank facility is a live process, and a process you never run is one you do not really have.

In June 2026, at the Stockholm International Banking Crisis Management Conference, the Riksbank Governor told banks and other monetary policy counterparties to regularly test their operational capacity to borrow from the central bank. The test is a recommendation for now. The Riksbank said it is considering introducing mandatory test transactions as a later step.

For Swedish monetary policy counterparties, this is an operational recommendation from the Riksbank. For euro-area and other EU treasury and reporting teams, it is a useful read-across on central bank access readiness, not a direct Riksbank rule. What the Riksbank is questioning is not the size of the buffer. It is whether you can convert that buffer into central bank cash when the clock is running.

Related reading: our guide to LCR, NSFR and ALMM liquidity reporting

What the Riksbank borrowing capacity test asks for

The message was specific. Counterparties are now recommended to test their operational capacity by borrowing any amount from the Riksbank’s lending facilities against eligible collateral. Riksbank Certificates can be used as collateral for loans in the Riksbank’s standing lending facility. The point of borrowing an arbitrary amount is to exercise the plumbing, not to fund anything.

The timing is driven by the balance sheet. The amount of liquidity in the Swedish banking system is falling as the Riksbank’s holdings of Swedish securities continue to decline. As that cushion of excess reserves shrinks, banks have to lean more on each other in the overnight market and on the Riksbank when they fall short. The Governor framed the lending facilities and market operations as something counterparties should treat as a natural part of daily liquidity management, not as an emergency door they hope still opens.

Why passing the LCR is not the same as liquidity access

The liquidity coverage requirement sits in Article 412 of the Capital Requirements Regulation, Regulation (EU) No 575/2013, and is specified in detail by Commission Delegated Regulation (EU) 2015/61. It requires institutions to hold liquid assets that cover net outflows over a 30-day stress window, binding at 100 percent since 2018. Sweden is in scope because the CRR is an EU regulation that applies directly in every Member State.

Here is the part teams misread. The LCR was built after the 2007 to 2008 crisis precisely to make banks less dependent on central bank liquidity provision and more resilient to sudden shocks. It measures the stock of high-quality liquid assets and assumes those assets can be monetised. It does not verify that you hold a live account, pre-positioned collateral, and trained staff who can turn a securities pledge into central bank cash in hours.

The regulation keeps buffer eligibility and operational access separate. Under Article 10(1)(b)(iii) of Commission Delegated Regulation (EU) 2015/61, reserves held at a central bank qualify as Level 1 assets only where the institution is permitted to withdraw them at any time during stress and the withdrawal conditions are specified in an agreement between the competent authority and the ECB or the relevant central bank. Counting an asset in the LCR is therefore not the same as proving that the bank can draw central bank cash operationally when the clock is running.

Who supervises what in Sweden

The two relationships behind this often get collapsed into one, and they should not be. The Riksbank is the central bank. It runs monetary policy, the lending and deposit facilities, market operations, and the financial-stability mandate. Finansinspektionen is the prudential supervisor that enforces the CRR and the LCR in Sweden and receives the supervisory returns.

So the borrowing capacity recommendation comes from the Riksbank, not from Finansinspektionen, and it does not amend the LCR. A Swedish bank runs an LCR compliance relationship with Finansinspektionen and a separate operational borrowing relationship with the Riksbank. Nothing in the reported requirement changes a single outflow weight or buffer figure. What changes is the expectation that you can use the facility you have always assumed was there.

This mirrors how resolution authorities now think. The Single Resolution Board already expects banks to show they can mobilise liquidity in resolution, not merely report it, which we cover in the SRB liquidity and funding in resolution guidance.

Where central bank access shows up in your reporting

If you file EU liquidity returns, the Riksbank’s question already has a home in your data. Additional liquidity monitoring metrics, the ALMM family, sit under Article 415(3)(b) CRR and are reported under Commission Implementing Regulation (EU) 2024/3117, the implementing technical standards on supervisory reporting.

Two templates carry the operational liquidity story. The maturity ladder, C 66.01, includes counterbalancing capacity over time. Template C 71.00 captures concentration of counterbalancing capacity by issuer or counterparty. Under Article 18 of Commission Implementing Regulation (EU) 2024/3117, large institutions submit C 66.01 and C 67.00 to C 71.00 monthly. Counterbalancing capacity is, in plain terms, the stock of unencumbered assets or other funding sources that are legally and practically available to cover potential funding gaps. Where assets are pre-positioned at a central bank for standard liquidity operations, the C 71.00 logic looks through to the original issuer or counterparty rather than treating the central bank as the issuer, except for the specified central-bank row.

A maturity ladder can show counterbalancing-capacity lines that assume collateral the desk has never moved to a central bank. The number was correct on its own terms and untested in every other sense. That is exactly the assumption a borrowing test checks. Your ALMM submission already asserts you have this capacity. The Riksbank is asking you to prove the assertion. For the mechanics of the wider buffer, see how LCR, NSFR and ALMM fit together.

What operational capacity looks like in practice

Operational readiness is mundane until it is not. It means an active counterparty account, collateral that is pre-positioned or can be pledged at short notice, settlement instructions that actually work, and named staff authorised to execute the draw. Each link is boring. A broken link is not.

The Riksbank made this point at a banking crisis management conference for a reason. Deposit outflows can drain a balance sheet faster than a treasury team that has never run a live draw can react. The common failure is concentration of knowledge. The front-office liquidity manager knows the process; the people who would cover a weekend, a vacancy, or a sudden escalation have never executed it once. A test transaction exposes that before a real run does.

There is a documentation angle too. The internal liquidity adequacy assessment process is where a bank sets out its liquidity risk management, and a tested borrowing route belongs in it. If you maintain an ICAAP and ILAAP, the question of whether central bank access has been exercised, and by whom, is an ILAAP question, not a footnote. A voluntary test now is cheap insurance against a mandatory one later, and far cheaper than a failed draw mid-crisis.

How this fits the wider supervisory direction

The Riksbank is one central bank making a national recommendation, so do not over-read it as EU law. Even so, supervisors and central banks increasingly treat tested access, not just reported buffers, as the real standard for liquidity resilience, a theme that also runs through the ECB’s 2026 SREP liquidity priorities. EU teams outside Sweden should expect similar questions from their own central banks, even where no formal test is yet on the table.

Frequently Asked Questions

Is the Riksbank borrowing capacity test mandatory?

Not yet. Counterparties are recommended to test voluntarily by borrowing from the Riksbank’s lending facilities. The Riksbank said it is considering mandatory test transactions as a later step.

Does this change Sweden’s LCR requirement?

No. The LCR is set by Article 412 CRR and Commission Delegated Regulation (EU) 2015/61 and is supervised in Sweden by Finansinspektionen. The Riksbank recommendation is about operational readiness to borrow, which is separate from the LCR calculation and unchanged by the speech.

What collateral can a bank use to run the test?

Eligible collateral for the Riksbank’s lending facilities. The Riksbank stated that Riksbank Certificates can be used as collateral for loans in the standing lending facility. Other test borrowing should follow the eligible-collateral rules for the facility used. The amount borrowed is arbitrary because the aim is to exercise the process.

Why is the Riksbank raising this now?

Liquidity in the Swedish banking system is falling as the Riksbank reduces its holdings of Swedish securities. With fewer excess reserves in the system, banks must rely more on interbank lending and on borrowing from the Riksbank, so the facilities have to work in practice.

Where does central bank access appear in EU reporting?

In the ALMM templates under CIR 2024/3117: the maturity ladder C 66.01 and the counterbalancing capacity concentration template C 71.00. Central bank reserves also feature in the LCR liquid-asset rules under Article 10 of Commission Delegated Regulation (EU) 2015/61.

Does an LCR above 100 percent mean we have liquidity access?

No. The LCR measures the size of the buffer. Access depends on having a live account, pre-positioned or pledgeable collateral, working settlement, and staff who can execute a draw. Those are not tested by the ratio.

Who at the bank should own the test?

Treasury and liquidity management, working with the central-bank operations function. Whether the route has been exercised, and by which staff, belongs in the ILAAP, not only in a desk procedure.

Does this apply to banks outside Sweden?

The recommendation applies directly to the Riksbank’s own monetary policy counterparties. The EU LCR and ALMM framework applies across the EU, and other central banks increasingly expect comparable borrowing readiness, so the operational lesson travels even where the formal test does not yet.

Related Articles

Key Takeaways

  • The Riksbank borrowing capacity test asks counterparties to actually borrow from the central bank to prove their operational access, voluntarily for now, with mandatory test transactions under consideration.
  • The trigger is falling system liquidity as the Riksbank runs down its Swedish securities holdings, which forces banks back onto interbank and central bank borrowing.
  • It is not an LCR change. The LCR sits in Article 412 CRR and Delegated Regulation (EU) 2015/61 and is supervised by Finansinspektionen, while the Riksbank runs the lending facilities.
  • An LCR above 100 percent measures the buffer, not access. Live accounts, pre-positioned collateral, working settlement, and trained staff are what convert the buffer into cash.
  • Central bank access already lives in your ALMM data: counterbalancing capacity in the maturity ladder C 66.01 and template C 71.00 under CIR 2024/3117.
  • Concentration of knowledge is the classic failure point. The people who would cover a real escalation are often the ones who have never run the draw.
  • Record whether the borrowing route has been exercised in the ILAAP, not just in a desk procedure.
  • EU teams outside Sweden should expect similar readiness questions from their own central banks even without a formal test.

Sources and References

  • Sveriges Riksbank, speech: The banks should regularly test their operational capacity to borrow from the Riksbank (June 2026) – riksbank.se
  • Sveriges Riksbank, notice: Riksbank takes measures to facilitate banks’ liquidity management (2026) – riksbank.se
  • Commission Delegated Regulation (EU) 2015/61 (Liquidity Coverage Requirement), Article 10 (Level 1 assets) – EUR-Lex CELEX 32015R0061
  • Regulation (EU) No 575/2013 (Capital Requirements Regulation), Articles 412 and 415 – EUR-Lex CELEX 32013R0575
  • Commission Implementing Regulation (EU) 2024/3117 (ITS on supervisory reporting), Article 18 and ALMM templates C 66.01 to C 71.00 – EUR-Lex CELEX 32024R3117
  • European Banking Authority, Single Rulebook Q&A 2016_2611 and 2017_3097, and the ALMM template instructions for C 71.00 (concentration of counterbalancing capacity by issuer/counterparty) – eba.europa.eu

Test the draw before you need it

The uncomfortable truth here is that the riskiest part of a liquidity plan is the part nobody has run. The Riksbank is asking a narrow, answerable question, and so should your own board: when did we last borrow from our central bank, and who executed the draw? If the honest answer is never, the borrowing capacity test has already told you where to start.

Disclaimer: The information on RegReportingDesk.com is for educational and informational purposes only. It does not constitute legal, regulatory, tax, or compliance advice. Always consult your compliance officer, legal counsel, or the relevant supervisory authority for guidance specific to your institution.

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