not been needed. that is all i wish to say about oil prices, other than to add the caveat that i am only talking about the increases to date. obviously, if we enter a new round of similar increases, the situation would have to be reassessed. world interest rates it is well known that the world has recently gone through a phase of exceptionally low interest rates, but i am not sure that people appreciate how low they were by historical standards. in fact it is not much of an exaggeration to say that interest rates in mid 2003 were at their lowest level for a century. this was the time when official overnight rates – the ones set by central banks – were 1 per cent in the united states, 2 per cent in the euro area, and zero in japan. the only qualifications i have to make to my earlier generalisation is to concede that rates may have been slightly lower during the second world war in some countries such as the united states and united kingdom when quantity rationing was the norm, but they have not been lower in peace time. we can construct an indicator of world interest rates for a century or more using a weighted average of the rates for the united states, united kingdom, germany and japan. graph 1 shows the results for official overnight interest rates or their nearest equivalent since 1860. although the graph is dominated by the high interest rates during the great inflation of the 1970s, the readings for 2002 and 2003 are lower than any other time in this long span of years. 1 part of the explanation is that inflation was low, but it was only low compared to the post - war standard – it was not low compared to most of the period covered by the graph. in fact if we construct simple measures of real interest rates ( based on realised inflation rates ), they were also low by the standards of earlier low inflation periods. 2 in table 1, real interest rates in the first five years of this decade are lower than in any previous decade apart from those containing the two world wars and the 1970s. graph 1 the observation for 1923, the year of the weimar inflation in germany, had to be deleted because it did not fit on the scale. the problem with most measures of real interest rates is that they become negative during periods of unanticipated rises in inflation such as the 1970s. for this reason, meaningful comparisons of real interest rates ( using realised inflation rates ) should only be made for periods of low and stable inflation such as the present.

cecilia skingsley : experience with macroprudential policies summary of a speech by ms cecilia skingsley, deputy governor of the sveriges riksbank, at a workshop arranged by the committee on the global financial system, bis, held at the hong kong monetary authority, hong kong, 10 august 2015. * * * since the global financial crisis, several countries have started implementing macroprudential policies. this workshop has provided us with the opportunity to deepen our knowledge regarding how different countries choose, calibrate and implement different kinds of macroprudential instrument. we have also gained a greater understanding of the efficiency of these instruments, as well as of how different countries incorporate macroprudential settings in the calibration of monetary policy. although we have come a long way the past few years as regards setting up institutional frameworks and developing tools, macroprudential policy is still a relatively new policy field in many countries and there are many important issues that need to be addressed. i would like to elaborate on three of these issues. the first is the challenge of determining the proper mix of policy instruments and the right balance between them, and deciding how fast and resolute our actions should be when imbalances are building up. for example, on the one hand, we know from international experience that credit growth can be difficult to curb once it starts accelerating. this would speak in favour of prompt and strong measures. but, on the other hand, since we only have limited experience of macroprudential instruments, a step - by - step approach may seem more attractive. furthermore, even if the first best solution would be bold steps, it may be more difficult to gain consensus for these. i think it would be better and more reasonable to take a number of small steps in order to avoid inaction bias and a standstill in reforms. taking sweden as an example : in its biannual financial stability report, the riksbank outlines several alternatives for how the growing risks associated with increasing household debt may be managed. the second issue that needs to be addressed is how macroprudential policy should interact with other policy areas when it comes to tackling systemic risk. my view is that monetary policy could take systemic risk into consideration under the precondition that this doesn ’ t conflict with the objects of monetary policy. that is, if the object of monetary policy is inflation targeting, monetary policy may very well serve as a line of defence if inflation is not