the riksbank began operations in 1668. previously, sweden was served by the stockholms banco (also known as the bank of palmstruch), founded by johan palmstruch in 1656. although the bank was private, it was the king who chose its management: in a letter to palmstruch, he gave permission to its operations according to stated regulations. but stockholms banco collapsed as a result of the issuing of too many notes without the necessary collateral. palmstruch, who was considered responsible for the bank's losses, was condemned to death, but later received clemency. on 17 september 1668, the privilege of palmstruch to operate a bank was transferred to the "riksens ständers bank" ("bank of the estates of the realm") and was run under the auspices of the parliament of the day. due to the failure of stockholm banco, the new bank was managed under the direct control of the riksdag of the estates to prevent the interference from the king. when a new riksdag was instituted in 1866, the name of the bank was changed to sveriges riksbank.