financed an expensive home through loans may therefore become very sensitive to corrections in house prices for a long period to come. how have we taken these risks into account so far? it may be useful to compare our decision in june 2005 with our decision at the beginning of 2006. in june 2005 we had been concerned for a long time over the future effects of increases in house prices and debts in sweden, but when we saw that the national accounts data showed that growth in demand was not as broad and strong as we believed, consideration to growth and inflation 1 - 2 years ahead outweighed this and we cut the repo rate. at the beginning of 2006, however, it was clear that growth was broader and stronger than we had earlier believed and that inflation would thereby gradually rise towards the target. concern over the future effects of exaggerated increases in house prices and debts then contributed to the arguments in favour of an interest rate increase outweighing those against and we raised the repo rate. the strong growth in the housing and credit markets was also taken into consideration in the most recent monetary policy decision, which can be seen in press release 2006 - 06 - 20. conclusion as i observed to begin with, the claims that the riksbank has introduced new parallel targets in addition to the inflation target are wrong. the fact is that the riksbank conducts a flexible inflationtargeting policy and within the framework for this we take into account risks of large fluctuations in the real economy and inflation over a long period of time. historically, low interest rates over a long period of time risk leading to households borrowing too much, which pushes up house prices. abrupt price corrections later on may subdue real demand and inflation. to reduce the risk of such imbalances building up, we can choose to raise the interest rate slightly more quickly than is warranted by the inflation forecasts. the positive effects in the form of a lower risk of future abrupt corrections must be the interest rate burden for indebted households was just over 5 % in 2004. balanced against the losses in the form of lower demand and inflation that will arise in the short term. however, one problem is that such risks cannot be quantified. this increases the difficulty for a central bank to be open and clear regarding the bases for its monetary policy decisions. maintaining confidence in the inflation - targeting policy is a central bank ’ s most important task and it sets limits as to how many considerations monetary policy can take.

elizabeth a duke : from community banker to central banker – my journey speech by ms elizabeth a duke, member of the board of governors of the federal reserve system, at the robins school of business, robins executive speaker series, university of richmond, richmond, virginia, 16 january 2012. * * * it is certainly a pleasure to be here at the university of richmond and take part in the robins executive speaker series. tonight i have been asked to share with you some of the memorable experiences and amazing opportunities that have shaped my journey from theater major to part - time drive - through teller to federal reserve governor. i ’ ll talk a bit about banking and the important role lending plays in the economy. i ’ ll describe how my banking career led me to a seat on the federal reserve board and how that unique perspective helped me add value after i arrived there. i will then explain some of the actions taken by the central bank at a time of extraordinary financial uncertainty, and i ’ ll describe some of the attributes that make the federal reserve an institution like no other. i ’ ll end with a few thoughts that might resonate with the students in the audience as they conclude their studies and prepare to join the workforce. bye, bye, broadway – hello, boardroom i never planned to be a banker. i wanted to be an actress. i spent my college years pursuing a degree in dramatic art. i chose a career in banking for one simple reason : i needed a job. regardless of economic conditions, the acting profession has an unemployment rate of about 95 percent – or so it seemed to me at the time. so i looked for something i could do almost anywhere and with hours that would leave plenty of time to pursue my dream. i found a job as a part - time drive - through teller. later, when i needed a full - time job, i went to work in a start - up bank. and even though i didn ’ t start out to be a banker, i found a career in that little bank. the president of the bank was a man named burt harrison. burt was an old - fashioned community banker and a natural teacher. he taught me everything he knew about banking, and that was plenty. fifteen years later, when he died suddenly of a massive heart attack, i had learned enough to take his place as chief executive officer. my banking education began with him as my mentor and with plenty of on - the - job training, which was later supplemented with industry schools