instance, house price developments slightly. i then said i would like to see measures such as finansinspektionen setting a limit for the loan - to - value ratio for new mortgages. now they have presented a proposal for this and we will carefully monitor its effects. leaning against the wind concerns, in my view, avoiding large fluctuations in inflation and the real economy – what provides the best - balanced monetary policy. it is thus about monetary policy, not financial stability. as shown in a survey made by finansinspektionen earlier this year, there are many indications that the households taking on loans are those that can afford to borrow. the riksbank has also drawn this conclusion so far in its financial stability reports. i therefore find it difficult to believe that the developments in the housing and credit markets at present would constitute any danger to the banks and thus to financial stability. concluding remarks in connection with dramatic events like the recent financial crisis, proposals for radical changes tend to crop up in the general debate. but i do not see a radically - different monetary policy ahead of me. i am still convinced that flexible inflation targeting is the best monetary policy solution for sweden. the repo rate is not the most effective weapon for trying to prevent or alleviate an imbalance in, for instance, the property market, but this does not mean it is completely ineffective. we must become better at analysing financial conditions and not least at capturing variables such as house prices and credit growth in our forecasts. and this is something we are working hard to achieve, both at the riksbank and in many other areas. we must become better at clearly explaining how we assess the risks of a bubble given a particular repo rate policy, and what consequences a bubble may have if it bursts. and we need, and will most probably also obtain, better support from the framework for financial stability that we and others are now working to develop both in sweden and abroad. when this project is complete, it will contribute to monetary policy more rarely needing to take into account untenable developments in the housing and credit markets. but i do not think we can achieve an entirely “ bubble - free ” world.

glenn stevens : the economic situation address by mr glenn stevens, governor of the reserve bank of australia, to ceda annual dinner, melbourne, 19 november 2008. * * * thank you for the invitation to renew my association with ceda, which goes back many years. ceda has, for half a century, sought to promote informed discussion and balanced development of the australian economy. that long - run perspective is never more important than at times like the present, when a cyclical event is under way and confidence tends, understandably, to wane. the global economy is at an important juncture. after a number of years of very strong growth, the latter part of 2008 and 2009 look almost certain to be characterised by the weakest international economic conditions for many years. of course, global growth had already been slowing, after several years of very heady expansion that had stretched the limits of resource availability and pushed up commodity prices sharply. inevitably, the slowing was initially uneven and some countries – notably the united states – had been battling economic weakness longer than others. but global growth prospects have been marked down significantly further in the space of just a couple of months, with the weaker picture led by the united states but by no means confined to it. the proximate trigger for the sudden deterioration in people ’ s assessment of the outlook was a sequence of financial events. it was not that these events initiated the slowdown, but they have led people to think that it will turn out to be a bigger event than hitherto expected. what had been for over a year a serious dislocation in international financial markets, but one which seemed to be being managed, turned quite suddenly into a very serious crisis during the weeks following the failure of lehman brothers on 15 september. in a breathtaking turn of events, the financial landscape changed dramatically, with the failure or rescue and effective nationalisation of a number of systemically important financial institutions in the united states, the united kingdom and continental europe. share markets slumped, currencies moved abruptly, commodity prices continued their sharp decline and investors ’ appetite for risk contracted further. not only that, but the constraints on credit that periodically had been flaring up over the preceding year became more widespread, and are likely, if they persist, to have significant effects on economic activity in many countries and on trade between them. until september, while the cost of borrowing for banks and low - rated corporates had increased, it had been the case that the most highly