stefan ingves : evaluation of the riksbank ’ s monetary policy and work on financial stability 2005 – 2010 speech by mr stefan ingves, governor of the sveriges riksbank and chairman of the basel committee on banking supervision, to the riksdag committee on finance, stockholm, 31 august 2011. * * * the riksdag ( the swedish parliament ) and the people of sweden must be able to see that the riksbank is doing its job well. it is therefore necessary for them to have good insight into our work and for the riksdag to be able to make regular evaluations of this work. the evaluations are also important for the riksbank to be able to develop and improve its analyses. we have already said on several occasions that we consider it an excellent initiative by the committee on finance to regularly commission highly - qualified external experts to evaluate our work. today, when we are to discuss the second evaluation of this type, i would therefore like to begin by thanking professors goodhart and rochet for carrying out this work on behalf of the riksdag committee on finance. we also welcome the committee on finance ’ s decision to give the evaluators the task not only of assessing how we conduct monetary policy, but also how we manage the task of promoting a safe and efficient payment system, that is, what we have interpreted as our responsibility for financial stability in sweden. we at the riksbank prefer to present our more detailed views on the evaluation during the consultation rounds, so today i intend to make a few more general comments. regarding financial stability – we need clear legislation and efficient institutions i do not believe that anyone would still doubt that the risk of a financial crisis is a very real risk that we must learn to live with and to manage in the best possible way. it is probably also quite clear what is at stake here – a financial crisis could entail substantial costs for society. we must therefore learn from the experiences of the crisis and ensure that we are as wellequipped as possible to face any new crises in the future. this requires in an initial stage taking an overall approach to both crisis management and crisis prevention work, something that the government ’ s recently - appointed financial crisis commission has been tasked to deal with. ultimately, the goal is to establish effective legislation and efficient institutions. the financial crisis that we have lived with over the past few years has tested institutions and legislation to breaking point, in sweden and abroad

different stages in the monetary policy process does not correspond to how the forecasting and policy - making work is carried out since the new repo rate path was introduced. in their view, the changes have meant that, in practice, the actual interest rate decision has been brought forward. they therefore recommend that the riksbank should announce the monetary policy decision and bis central bankers ’ speeches interest rate path earlier, namely directly after the meeting of the executive board that is held a couple of days after the second monetary policy group meeting. however, we consider this proposal to be difficult to implement. although the analyses and forecasts are largely complete by the second monetary policy group meeting, the monetary policy decision is made at the monetary policy meeting and not before then. any reservations against the decision are put forward at this meeting, too, and not earlier. in conclusion, let me once again thank professors goodhart and rochet for their valuable contribution to our continued work on both monetary policy and financial stability. we will have many opportunities during the course of this work to discuss with the committee on finance how we can develop and improve our analyses. bis central bankers ’ speeches