Macroprudential policy can also prevent the build-up of asset bubbles in specific sectors in a context of low interest rates. This complementarity should not however jeopardise the independence of central bank monetary policy decision-making. 2  BIS central bankers’ speeches  (ii)  Second, the optimal framework must promote consultation with fiscal authorities in order to ensure the full effectiveness of macroprudential policy measures that are often designed as Pigouvian Taxes generating resource transfers. This requires cooperation and information-sharing among the authorities involved in macroprudential policy decisions. Such as many countries have already adopted, a collegiate macroprudential authority, with a clear division of responsibility between central banks, the ministry of finance, market authorities, and banking supervisors, can ensure this cooperation. I will not dwell further on these topical issues, which am sure will give rise to fascinating discussions. It is my hope that we can collectively contribute to enlighten this policy debate. Let me now give the floor to our panellists. I suggest that we start with Governor Daniel Tarullo, who will give us the vision of the United States on macroprudential issues. BIS central bankers’ speeches  3

Employer’s bank  Employer  Other financial market participants – in and outside Sweden  The financial crisis of 2007-2009 impacted borrowers in other countries hard  Source: Federal Reserve Boston  BIS central bankers’ speeches  7  Problems in the housing sector could have severe consequences for households Distribution of new mortgage loans by amortisation period, per cent 70 60 50 40 30 20 10 0 0 - 10  10 - 30  30 - 40  40 - 50  > 50  None  Amortisation period, years Source: Finansinspektionen  The European Commission is concerned about developments in Sweden From Alert Mechanism Report 2011/2012  ”Despite overall good macroeconomic performance some countries display developments in assets markets, including in particular housing, and a continuous build-up of indebtedness in the private sector, which also warrant further analysis”   The European Commission would like a closer examination of Swedish households’ indebtedness    Sweden’s mandate to handle the situation depends on how the Basel III regulations are implemented in the EU  Source: European Commission  8  BIS central bankers’ speeches  The Riksbank has an important role to play in the prevention of financial crises The Riksbank is responsible for means of payment and can provide liquidity  The Riksbank monitors the financial sector with a systemic perspective  But the Riksbank lacks sharp preventive tools  The Riksbank represents Sweden in International regulatory cooperation  Preventing financial crises is of great importance for Swedish households Swedish households need functioning financial services and protection from financial crises and their effects  Citizens have the right to expect that authorities will prevent and manage financial crises to the best of their ability  Authorities need the right tools to prevent and manage crises  BIS central bankers’ speeches  9  References European Commission (2012): Alert Mechanism Report Finansinspektionen (2012): Den svenska bolånemarknaden (the Swedish mortgage market) Modestino, A. S., & Dennett, J.