The Swedish financial markets are functioning better now than they did during the autumn of 2011. This view is expressed by the majority of the participants in the Swedish fixed income and foreign exchange markets that have responded to the Riksbank's Risk Survey during the spring of 2012. According to the respondents, it is primarily the extensive lending by the European Central Bank (ECB) that has contributed to the increased liquidity and greater risk propensity on the European markets, which has also spread to the Swedish markets. Moreover, the fiscal reforms presented by several highly-indebted countries are considered to have reinforced this positive development. The respondents also assess that liquidity has improved in most instruments on the Swedish fixed income and foreign exchange markets.

At the same time, a majority of the respondents believe that the Swedish financial markets will function neither better nor worse during the coming six months. This is because the...