Sweden's Riksbank has published a staff memo by Cristina Cella of its Financial Stability Department examining how Swedish banks adjusted credit supply after Russia's full-scale invasion of Ukraine in 2022. The analysis finds that lending to companies increased overall, but banks shifted credit away from energy-intensive sectors and financially vulnerable borrowers. Borrowing costs changed only marginally, indicating that the adjustment took place mainly through which firms received loans rather than through broad repricing. Using loan-level data from the KRITA credit database and bank-level measures of geopolitical risk exposure, the memo finds that term loan volumes rose by about 2.4 percent in the invasion month and 3.8 percent one month later relative to the month before the invasion. Over the March to April 2022 post-invasion window, lending to energy-intensive industries increased by about 1.7 to 1.8 percentage points less than to other sectors, while their borrowing costs rose only 1.6 to 2.1 basis points relative to other firms. Financially vulnerable firms also saw smaller increases in lending across the corporate sector, and banks with higher pre-invasion exposure to geopolitical risk expanded lending less and raised rates slightly more than less exposed peers. The memo says further analysis of more recent events is planned as a follow-up to this work.
Riksbank2026-06-30
Sweden's Riksbank staff memo finds banks redirected post invasion lending away from energy intensive and financially vulnerable firms
Sweden's Riksbank published a staff memo finding that Swedish banks increased lending after Russia's full-scale invasion of Ukraine but redirected credit away from energy-intensive and financially vulnerable firms. Banks with greater pre-invasion exposure to geopolitical risk tightened lending more than peers. Borrowing costs moved only slightly, pointing to loan selection rather than broad repricing.