A favourable era for financial regulation followed. This momentum was spurred by revived international cooperation at the highest level, with the milestone G20 Summits in 2009 and 2010 – the political laboratory of the following financial reforms. They resulted in several achievements to strengthen the existing regulatory framework for financial institutions, but also in bringing unregulated segments, activities and actors under supervisory watch – such as over the counter markets, rating agencies and hedge funds. Significant progress has been made on these fronts; even though there still remains room for improvement, notably for a better regulation of non-banking financial intermediation (NBFI) – I will come back to this issue. Page 2 sur 11 In the banking sector, improvements in the regulatory framework are more than evident. The Basel III Agreements finalised in 2017 require larger and sounder buffers for the banking sector and strengthen market discipline. In Europe, as you know well, the Great financial crisis was closely followed by a public debt crisis resulting from the sovereign-bank nexus. As a response, the euro area has forged the Banking Union. Overall, the European banking sector has become much more resilient. Requirements have also been increased in the insurance sector, with the entry into force of the new Solvency II regulatory framework in 2016, which is currently under revision. After the mid-2010s, faced with two structural transformations – ecological and digital –, Europe has been a pioneer in adapting its regulatory framework to be up to the task.

The repo rate path also has significance for developments in long-term rates, although other factors than expected repo rates, such as international events, may have significance in the development of long-term interest rates. Figure 1 Interest rates at different maturities in Sweden Per cent  Note. The interest rates refer to treasury bills and government bonds. Sources: Reuters EcoWin and the Riksbank. Greater openness and clarity from the Riksbank creates better conditions to govern expectations in the corporate and household sectors. The publication of a repo rate path can be regarded as a contribution to this. Any forecast for the Swedish economy made by any reasonable type of model also generates a forecast for the repo rate. So why should one  2  See, for example, Michael Woodford (2005): “Central Bank Communication and Policy Effectiveness”, paper presented at the conference Inflation Targeting: Implementation, Communication and Effectiveness, Sveriges Riksbank. 2  BIS Review 85/2010  then “hide the most central forecasting variable”, as my Executive Board colleague Lars Svensson put it. 3 A particular advantage in publishing one’s own repo rate path is the opportunity to describe alternative scenarios for future economic developments and the consequences they would have for monetary policy. This has made it easier for market participants and households to judge how we Executive Board members will act with regard to the repo rate depending on the different alternative paths for growth and inflation. The Monetary Policy Report shows alternative scenarios, not merely for economic developments, but also for the repo rate.