Other countries with a flexible exchange rate and an inflation target have had similar experiences, for example Australia, Canada and New Zealand. It not only complicates assessments of the future path but also probably entails costs in the form of a poorer real economic trend. Conclusion Monetary policy in Sweden has been conducted with an inflation target and a flexible exchange rate since January 1993. The results have been good in many respects. Since the upturn in the summer of 1993, growth has been good compared with, for example, the years of high activity in the late 1980s. In contrast with that period, moreover, inflation has been low. Another point worth noting is the good real wage trend. With the low price rise, the annual real wage increases have averaged 2.5 per cent since 1994, which is more than in the 1980s, for example, when nominal wages rose rapidly but what households actually gained in real terms was very modest. BIS Review 81/1998  -7Monetary policy also seems to be better understood. Presumably this is mainly because, in spite of everything, economic development in recent years has been relatively good. The change in attitudes is evident in surveys of how people perceive the Riksbank and monetary policy. A similar picture is obtained from the treatment of the Bank and monetary policy in the Swedish press. Our basic line of thought has been broadly accepted, though from time to time there has naturally (and sometimes perhaps even rightly) been criticism of what we do.

First, the major public financial institutions were at the forefront of this movement. This is the case for the European Bank for Reconstruction and Development or the Caisse des Dépôts, with its subsidiary CDC-Climat. The European Investment Bank estimates that it currently grants 25% of its loans – over EUR 20 billion per year – to “green” projects. Second, under the aegis of the United Nations, projects were launched such as the UNEP finance initiative, a partnership between the United Nations Environment Programme and 200 financial sector institutions, which make environmental sustainability a collective responsibility, share best practices and establish principles for green financing. Thanks to the Montreal climate change protocol, or to the Portfolio Decarbonization Coalition, signatory investors commit to measuring and disclosing the carbon footprint of their portfolios. The objective is ambitious: reduce investment in carbon-intensive projects by several hundred billion dollars. Lastly, financial institutions are now making more direct commitments. French banks and insurance companies have recently announced that they have withdrawn their support for the coal industry and increased their financing of renewable energies. Paris Europlace called for the creation of an energy transition fund, which would be invested in by French banks, insurers and asset management companies, and which could in turn invest EUR 10 billion by 2020, with a view to financing projects to improve energy efficiency or promote renewable energies. This is a commendable initiative. II/ To best align these private initiatives with the fight against global warming, which is a public good, public intervention is nevertheless necessary.