Structural macroprudential objectives motivate regulatory tools such as additional capital requirements for systemically important banks (“SIFI surcharges”), which aim to reduce the probability that a large institution fails, and resolution and recovery planning, which seeks to limit the damage in the event of failure. The second set of macroprudential objectives are cyclical objectives, focusing on the build-up of risks during credit and asset price booms and the consequent pull-back in financial intermediation during periods of stress. Cyclical macroprudential goals motivate regulatory and supervisory tools that “lean against the wind” in good times and “lean into the wind” during stress, such as the countercyclical capital buffer, the design of stress test scenarios, and time-varying loan-to-value restrictions, which are imposed in some countries. The macroprudential objectives of the SCAP reflected both structural and cyclical concerns. The primary goal was to ensure that large banks had sufficient capital to withstand an even-worsethan-expected economic downturn and still be able to lend—a structural perspective. Each of the 19 banks was required to raise additional capital if the stress tests indicated a shortfall relative to the supervisory target. However, the SCAP’s objectives also embodied cyclical concerns, namely, to provide confidence that banks could continue current lending (“leaning into the wind”) and thus reduce the likelihood of a worse-than-expected economic outcome. In the paper, we identified six elements that we argued made the SCAP a successful macroprudential exercise: comprehensiveness; consistency; multiple, independent estimates; diverse perspectives; transparency of process and results; and clear and predictable goals and actions.

Employment in the services sector, which managed the crisis better, is also expected to continue increasing. Resource utilisation is rising gradually Swedish GDP growth is expected to amount to almost 5 per cent in 2010, before gradually falling back to around 2.5 per cent at the end of the forecast period. But as the fall in 2008 and 2009 was so great, GDP will not return to its pre-crisis level until the beginning of next year (Figure 5). The overall assessment of resource utilisation is that it is still lower than normal, but that it will successively rise towards normal levels during the forecast period. It is natural to assume that the higher resource utilisation will gradually have an impact on inflation. Although CPIF (underlying) inflation will continue to fall slightly over the coming year, partly due to a stronger krona, it will then increase, reaching 2 per cent at the end of 2013 (Figure 6). CPI inflation will be slightly higher, as it is affected more directly by the Riksbank’s interest rate increases via households’ mortgage rates. The assessment we made a couple of weeks ago was that an increase in the repo rate of 0.25 percentage points was justified. We also assumed that we will need to continue raising the repo rate over the coming years to stabilise inflation close to the target and to attain normal resource utilisation. However, we do not believe that the repo rate will need to be raised quite as quickly as we had previously assumed.