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671

(1914) [MARC] Author: Joseph Guinchard
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present administration and business activity op the riksbank. 671

the title Bankofullmäktige, Riksbank Commissioners. One of their number,
the Chairman, is nominated by the King, the others by the Riksdag in
accordance with the recommendations of an ad hoc selecting committee.
The Court of Directors elects from among those of its members ohosen by
the Riksdag three Delegates (Deputerade), to act as the managing directors
of the Bank. A member of the Bank Court is not permitted to be on the
board of directors of any other bank unless it be a savings-bank or the
Post-Office Savings-Bank.

The capital of the Riksbank is fixed at 50 million kronor. At least
10 per cent of the annual profit is to be passed to the reserve fund, until
the latter has become equal to 25 °/o of the capital (since 1909 the reserve
fund has been 12-5 million kronor). Otherwise the Riksdag has the right
of disposal of the annual profit. — The Riksbank’s note issue is restricted
in the following manner: it is allowed to issne notes to the extent of:
a) double the amount of the gold held by the Bank (which in case of a fall
below 75 million kronor must be restored to that minimum as soon as may
be), and b) 125 million kronor beyond that amount. To this, however, the
condition is attached, that the notes issued bej^ond the amount of gold held
shall be backed by: (1) readily negotiable Government Securities, (2) bonds
issued by the General Mortgage Bank, the National Town Mortgage
Bank of Sweden, or other Swedish bonds quoted on foreign Bourses,
(3) gold deposited at some place abroad or in process of conveyance
therefrom, (4) bills of exchange payable within or without the country,
(5) a credit balance at some bank or accepting-house abroad maturing
within six months, or (6) money advanced against securities or bonds
mentioned in (1) and (2) above. The bank-notes, which on presentation
are redeemable in gold at the head office of the Riksbank, are legal
tender throughout the country. Under ordinary conditions the five-kronor
note is the smallest note issued by the Riksbank.

Chiefly to enable the Riksbank to increase its covering for its notes,
the Bank is entitled to avail itself of foreign credit to the extent
determined by the Riksdag in its Bank Regulations (at present 20 million
kronor). The same purpose is answered by the provision that the Bank
shall hold readily negotiable foreign assets to an amount at least equal to
the reserve fund.

The Banking Business of the Riksbank. The Riksbank is entitled to
buy and sell gold and silver, Swedish bonds, and readily negotiable foreign
government securities quoted on foreign Bourses, while in virtue of
another agreement it is authorized to take over Swedish Government bonds
and easily negotiable foreign Government securities as well as to negotiate
the purchase and sale of Swedish Government bonds and the bonds issued
by the General Mortgage Bank. The Riksbank is furthermore
empowered to discount, or buy and sell, domestic and foreign bills with
at most six months to run; to make loans for at most six months on bonds,
shares, and other paper securities and commodities; to make loans on

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