Swedish central bank chief gets another six-year term

Sweden's central bank Governor Stefan Ingves will stay in his post for another six years, the Riksbank said on Tuesday, boosting analysts' hopes for continuity and predictability in policy making. The 58-year-old, who has been governor since January 2006, led the Riksbank's response to the 2008 global financial crisis, slashing rates and pouring liquidity into the markets.
He had been widely expected to extend his mandate at the Riksbank - the world's oldest central bank. The Riksbank said in a statement the decision to give Ingves a further term of office ensures good continuity in its work. "Stefan Ingves has done invaluable work as governor," Johan Gernandt, chairman of the General Council, and Sven-Erik Osterberg, vice chairman, said. "He is highly competent and able and has a valuable international network of contacts." Ingves, a former director of the International Monetary Fund and deputy governor of the Riksbank, was last week also appointed chairman of the Basel Committee on Banking Supervision.
The central bank said it would announce in the autumn successors to First Deputy Governor Svante Oberg and Deputy Governor Lars Nyberg, who will leave the Riksbank at the end of the year when their terms expire. "If Mr Ingves had not accepted another term, half of the board would have been replaced with heightened uncertainty about monetary policy," SEB Chief Economist Robert Bergqvist said in a note to clients.
"This is especially so since the board is already divided (4-2) with a minority so far consistently voting against rate hikes." The Riksbank has raised interest rates at six meetings in a row, bringing the repo rate to 1.75 percent from a historic low during the global financial crisis, and has guided for a steady succession of hikes to come.
Two of the six deputy governors, Karolina Ekholm and Lars Svensson, have entered reservations about recent decisions and forecasts, taking a more dovish stance than the others despite record growth last year. The governor has a casting vote when the board of the central bank is split. "This is not dramatic," SEB analyst Jussi Holjanen said of Ingves' new mandate. "If anything, this adds some stability to the path the Riksbank has been on."