It is not unusual for central banks with inflation targets to take practical account of financial stability in their monetary policy framework – a few examples of this are the Bank of England, the Bank of Canada, Norges Bank and the Reserve Bank of New Zealand. I consider that the Riksbank’s responsibility should also include financial stability and this should be clarified in the Sveriges Riksbank Act. In recent years, economic policy, including monetary policy, has focused on tidying up after the global financial crisis, which has been very expensive. 17 As monetary policy affects the economy through some of the same channels as various macroprudential policy measures and normal stabilisation policy, it seems likely that a slightly less expansionary monetary policy ahead of the financial crisis could have contributed towards a better economic development. We should therefore ask ourselves whether we should continue to consider financial stability 17 Estimating the overall cost to society of a financial crisis is difficult and associated with a high degree of  uncertainty. Sveriges Riksbank (2017b) notes that estimates in academic research indicate that the costs of a crisis can vary between 8 and 300 per cent of GDP, depending on which methodology is used, the definition of a crisis, the time horizon and the countries studied. For Sweden, it is estimated that the cost of a financial crisis can be expected to be around 180 per cent of GDP, calculated as the present value of the GDP loss over time.

As I have pointed out several times previously, I think it would be good if the Riksbank were to be given an extended mandate to prevent financial crises and, at the same time, were to be allocated some macroprudential policy tools. The Swedish banking system has a relatively great need for wholesale funding in foreign currency. In order to provide liquidity support in foreign currency, the Riksbank therefore needs to maintain a sufficiently large foreign currency reserve. The Government's proposal that the foreign currency reserve should be roughly halved is risky. My assessment is that at least the current level of the foreign currency reserve is necessary to allow us to meet the needs that can be expected to arise in the short term in a financial crisis. 21 [23]  References Bernanke, Ben (2015), “Why are interest rates so low, part 2: secular stagnation”, Ben Bernanke’s blog, 31 March 2015, https://www.brookings.edu/blog/benbernanke/2015/03/31/why-are-interest-rates-so-low-part-2-secular-stagnation. Bernanke, Ben (2015), “Why are interest rates so low, part 3: the global savings glut”, Ben Bernanke’s blog, 1 April 2015, https://www.brookings.edu/blog/benbernanke/2015/04/01/why-are-interest-rates-so-low-part-3-the-global-savingsglut. Billi, Roberto and Anders Vredin, (2014), “Monetary policy and financial stability – a simple story”, Economic Review 2014:2, Sveriges Riksbank. Bjørnland, Hilde, (2017), ”Should monetary policy pay attention to financial stability?” in Erfaringer med inflasjonsmål for pengepolitikken, Arbeidsnotat 2017/4, Ministry of Finance, Norway. Blinder, Alan, (2010), ”How central should the central bank be?”, Journal of Economic Literature, 48:1, pp. 123–133.