In labour market economics, a system of insiders and outsiders is discussed, where insiders on the labour market benefit, to a far greater degree, from labour legislation that protects them from unemployment and gives them a more advantageous negotiating position for wage-setting and so on. At the same time, this makes it more difficult for outsiders to become established on the labour market. 12 Applied to the housing market, this reasoning could concern two areas. The first area concerns the dividing line between households on the rental market: the insiders, who have master leases for rented flats, and the outsiders, who lack such leases despite being willing to pay rents that are actually higher than those paid by the insiders. 13 Insiders on the rental market thus have a strong interest in maintaining the rent-setting system and have a strong shared voice to argue their case thanks to interest groups. The second area concerns the differences in a wider sense between the insiders who own their homes and who have, in theory, strong economic interests in maintaining their strong position, and the outsiders who have great difficulty in entering the ‘owned’ housing market. Here, I will focus on this latter example. Put  11 Emanuelsson et al. (2018). 12  See, for example, Lindbeck and Snower (2001). 13 See Lindbeck (2016). 4 [13]  simply, what insiders have in common is that, due to their strong position on each market, they can influence decision-makers to maintain their advantages.

The rotation from net asset purchases towards our conventional monetary policy instruments, together with our stock of assets and the related reinvestment policy, ensure an ample degree of monetary policy accommodation. In particular, our enhanced rate forward guidance provides a strong anchor for policy rate expectations. And the reinvestment policy will ensure that the favourable liquidity conditions and duration extraction associated with the large stock of assets on our balance sheet remain in place for a long period and thereby exert downward pressures on term premia. The mechanisms underlying the combination of instruments are duration extraction, liquidity creation and expectation management. Starting with duration extraction, our reinvestment policy implies that the bonds we have purchased will remain on our balance sheet for an extended period of time after the end of net purchases. Asset purchases affect interest rates mainly through the market price of duration risk, which is the interest rate risk borne by price-sensitive investors holding long-term bonds. If the central bank wants to exert downward pressures on long-term interest rates, then it can absorb duration risk from the market by purchasing securities with a relatively longer maturity. This frees up more risk-bearing capacity for investors, which they can re-allocate towards other types of risk, including investment in productive capacity. For a central bank to set this mechanism in motion, it needs to hold a large portfolio of long-dated securities embodying duration risk. Chart 5 shows that we have built a sizeable portfolio estimated at around 20% of the duration-equivalent stock of public debt.