two comments. the first of these is that size must be determined by the banking system ’ s size and funding structure. it is therefore inappropriate to confirm a specific figure by law, as it is very difficult to make an accurate forecast of how the banking system and financial markets will develop over the coming decades. my second point concerns whether foreign exchange should be held in advance or borrowed when problems arise. one advantage of having small foreign exchange reserves is that the running costs for them will be very small. if you believe that foreign exchange can always be borrowed when necessary, there is good reason to only have small foreign exchange reserves. but i have been involved in managing a number of banking crises around the world and one lesson i have learned from that work is how rapidly a developing crisis can worsen when foreign exchange reserves are not easily accessible. neither do i believe that it will be so easy to borrow foreign exchange fast enough in all conceivable scenarios and therefore consider it important that the possibility of holding well - balanced foreign exchange reserves is not restricted. sufficiently large foreign exchange reserves also send an important signal to the rest of the world that we are ready to manage problems should any arise. furthermore, it is always the lender who sets the terms, at the same time as lending preferably takes place to those who do not need to borrow. i thus consider that it should be the riksbank that decides the size of the foreign exchange reserves, as well as how they should be funded. in crises and times of unease, the riksbank must always consider all the 22 possibilities for performing its remit. if there are no other possibilities for the riksbank to secure access to foreign exchange other than issuing promissory notes in foreign currency in its own name, then such a measure must, of course, be considered and, indeed, implemented when circumstances demand it. a central bank must be able to use its balance sheet i have returned to the central bank ’ s balance sheet several times, this is because i consider there is a great probability that this will play an important role in monetary policy in the period ahead, just as it did earlier, at least if we are prepared to look further back in time than the great moderation. in addition, if real interest rates continue to remain on the weak levels we have seen over the last ten years, changes in the terms for the monetary policy facilities and securities purchases will become necessary parts of normal monetary policy. it is therefore important that the new

states, can be seen in us studies. 4 another possibility to improve the accounting is to look more closely at the link between labour and capital. so far the analysis has been based on the two resources in production being dealt with separately. but there are good examples of when labour and capital are interdependent. technical knowledge becomes particularly valuable with regard to the development of programs and systems, the production of computer games, etc. artists, film stars, elite athletes / sportsmen and others active in the experience industry get more out of their special skills through the developments in it and communications. the us central bank governor ben bernanke uses the company walmart as another example. 5 for the purpose of using the it investments the company had made, they reorganised their work, gave the staff further training and changed the relationship to their suppliers. this type of technique for general use, of which it can be said to be an example, can in turn push up other investment, such as further education. there are also other ways of developing the analysis. for instance, there are studies based on general equilibrium models indicating that the contribution of capital to productivity growth is forsling & lindstrom see, for example, stiroh ( 2001 ) and jorgenson et al ( 2006 ). bernanke underestimated in growth accounting. 6 if we avoid such underestimations the residual item declines. our knowledge has increased. and it is important for us at the riksbank to increase our knowledge of the development of productivity and of what might explain it. one of the current projects at the riksbank aims to obtain greater knowledge of how it investment, reorganisation and further education together affect productivity. better statistics lead to better analysis i would like to conclude this section with a few words on the considerable significance of economic statistics for being able to analyse productivity and the driving factors behind it. the previous us central bank governor, alan greenspan, was famous for his ability to take in large volumes of statistics. he became legendary when in the mid - 1990s he was the first to predict that productivity growth in the united states would strengthen as a result of increased use of it. this led to the central bank being able to conduct a more expansionary monetary policy for a period, without inflation rising. a few years ago i carried out an examination of economic statistics. my conclusions then were that these needed to be improved in four areas. all of them had in common that they were important to