in a crisis or otherwise in a difficult situation. if, for example, one raises the inflation target in a situation where inflation is much higher than the target, there is a risk that this will be perceived as giving in and taking the easy way out and that one will be expected to continue doing this the next time there is a problem. there is a corresponding risk if one lowers the target when inflation is undershooting the target by a long way, even if there are of course limits as to how low one can set the target. sooner or later expectations would probably adjust to the new target, but the adjustment period could prove costly. i also believe that it may be difficult to raise the target in a situation where inflation undershoots the target significantly, particularly if the central bank has cut the policy rate to the “ near zero lower bound ”, that is, the level at which may countries are now. here there is rather a risk that the increase will be perceived as a more or less desperate and in the worst case not particularly credible measure to obtain a little additional help getting out of a difficult situation. apart from the best time to change the inflation target being in a relatively normal situation, i would also think it would be easier if several central banks did it at the same time. for a definition of secular stagnation and a summary of empirical evidence and policy implications, see rawdanowicz et al ( 2014 ). see, for example, krugman ( 2014 ). see, for example, hamilton et al ( 2015 ) and rogoff ( 2015 ), who say that the world is in the adjustment phase of an unusually large debt cycle, a “ debt supercycle ”. see also the debate between bernanke ( 2015 ) and summers ( 2015 ). bis central bankers ’ speeches financial crisis has affected the central banks ’ analysis and working methods i have given some examples of questions that will probably continue to be argued in the international discussion of how inflation - targeting may need to be adapted and modified. this type of fundamental question of principle is central to monetary policy and, given that the current framework for inflation - targeting has worked well over a long time, any changes should be made slowly and cautiously – and are hardly in the pipeline in the near term. quite simply, we will have to see what takes shape after the international discussions. in the swedish debate we need to begin by taking a stance on the conclusions of the external evaluation of the riksbank ’

borrowing for consumption or in order to invest in shares, which could lead to rapid increased risks. in order to gain a better understanding of whether or not this is the case, the financial supervisory authority has recently commenced an examination of the banks ’ lending to the household sector. excluding repos. there are several reasons why property prices play a central role in any discussion of financial stability. in addition to the fact, as i mentioned earlier, that the credit demand among households is largely governed by the demand for and price level of property, property can also be used as collateral for loans. another reason for monitoring the property sector is that a large part of the banks ’ lending is to property companies. these companies also accounted for a large part of the loan losses during the banking crisis in the early 1990s. property prices have risen recently, and in particular the prices of residential property in metropolitan regions. in contrast to the 1980s, we do not see the same broad price increase across the whole of sweden, as was the case then. likewise, the causes of the rising prices appear to be low interest rates, a high rate of new occupancies and low construction activity rather than speculation. this indicates that there are currently no major risks of a fall in residential property prices. however, there is every cause to observe developments carefully. new construction always takes place with a considerable time lag and experience shows that many projects are not ready and do not come onto the market until after a turning point has occurred, at which point things can quickly deteriorate. with regard to commercial property, the development has been more moderate. again, it is mainly in the metropolitan areas that prices have risen due to high demand. the level of new construction continues to be low and most premises today are already leased before building commences. one way of analysing the extent to which speculative tendencies are inherent in property prices is to place the direct yield in relation to risk - free interest. 2 at the end of the 1980s, the risk - free interest rate was considerably higher than the direct yield on properties, which suggests that people bought properties on the expectation of future price rises and / or significant rent increases. today, the situation is different. direct yield levels appear reasonable in relation to risk - free interest. with regard to apartment buildings in stockholm, the direct yield is lower than the risk - free interest, but at the same time prices are affected by the fact that most property deals are made in connection with converting apartment buildings