there is also a lack of clear and expeditious procedures when new macroprudential policy tools are to be introduced. improvements are urgently needed here so that we can tackle risks in good time and such procedures have also been recommended by the eu ’ s macroprudential policy body, the european systemic risk board ( esrb ). 16 secondly, the swedish structure falls short also when it comes to clarity in the division of responsibilities. via its instruction, finansinspektionen was given the responsibility to “ take measures to counteract financial imbalances with the aim of stabilising the credit market ”. no definition of what finansinspektionen ’ s overall macroprudential policy task comprises has been formulated, however. this problem is highlighted by the decision process for the upcoming amortisation requirement. the government has indeed tasked finansinspektionen to produce regulations that more closely define the amortisation requirement but at the same time requires these regulations to be approved by the government before finansinspektionen adopts them. this is not in line with the esrb ’ s recommendation that the macroprudential authority should as a minimum be operationally independent from political bodies. 17 the importance of independence when adopting macroprudential policy measures is also underscored by goodfriend and king. this is, if anything, a return to the arrangement that often prevailed prior to the deregulations of the 1980s. a third problem with the swedish macroprudential policy framework is that it has not been established by law. finansinspektionen ’ s mandate in the macroprudential policy area is only a government ordinance and the stability council is formally only a committee. this is unfortunate as macroprudential policy is an important policy area and it is vital that a longterm, sustainable structure is created for it, so that macroprudential analysis is not given lower priority when other tasks require resources, and experiences from the crisis are forgotten. the stability council has so far played an insignificant role in practice. sweden deviates from international and european standards sweden thus deviates – in several respects – from european standards as regards how its macroprudential policy framework is designed. we have also organised the responsibility for macroprudential policy differently to most of the other countries in europe. in 13 eu member states, the responsibility has been given to the central bank, a similar

wage formation – did not function as intended. it was far from obvious that inflation targeting, introduced in 1993, would succeed in achieving what the fixed exchange - rate policy had failed to – to re - establish the anchor for price - setting and wage formation. today, we know that it did succeed and furthermore did so relatively quickly. if i was to pick out the most important contribution made by inflation targeting, it would be precisely this – providing a nominal anchor for the economy. as far as sweden is concerned, it is quite clear that the inflation target has helped provide greater orderliness by playing this role, and this has probably been an important explanation for the swedish economy having developed so favourably since the crisis at the beginning of the 1990s. … but these benefits seem to have begun to fall into oblivion as i noted earlier, there is broad support for the inflation target. but as regards wage formation, there is currently an opinion, at least in some quarters, that the inflation target has played its part and become irrelevant : it was important when bringing down wage inflation from its high levels of the 1970s and 1980s, but once this has been achieved, the target no longer fulfils any function and might as well be abolished. for several reasons, i see this as a historically questionable and myopic argument, and it would be unfortunate if this view were to gain a firmer foothold. first, it is always sensible to not let oneself be influenced too much by the prevailing situation when discussing the design of frameworks that are expected to be stable and be in place for a long time. it is of course true that the kind of inflation 9 and wage surge seen during the 1970s and 1980s does not seem likely in the foreseeable future. but at the end of the day, what do we really know about how the situation will be a few years in the future? even if inflation has been subdued in recent years, it is not likely that we have arrived at “ the end of inflation ” for all eternity. inflation has always varied and never been constantly high or low for any particular length of time ( see figure 1 ). it is difficult to see how society could have changed so fundamentally that this historical regularity now no longer applies. assume that inflation, for reasons we cannot currently identify, will be, say, 4 per cent a few years ahead. even those who now consider the inflation target having become irrelevant would probably then see the benefits of a credible anchor at 2 per cent.