lazear and spletzer ( 2011 ) show that reduced uncertainty can prompt greater “ churn ” in the labour market leading to more efficient matching of skills to jobs. bis central bankers ’ speeches as quantitative easing and the funding for lending scheme. but if, over recent years, many companies have been largely focussed on survival, waiting for some of the uncertainty to be resolved before actively considering opportunities to invest and expand, it ’ s possible that the easing of borrowing costs brought about by these policies has not yet fully translated into spending decisions. as uncertainty lessens, past monetary policy actions may gain greater traction, thus further supporting the recovery. so there are good reasons for thinking that the reduced uncertainty may help to facilitate this handover to business spending we need to see, and that some of those effects may be long lasting. but we also need to be alive to the possibility that the events of the past few years may colour and contaminate business behaviour for many years to come. it may be a long time before companies look ahead with the same confidence that they did during the period of remarkable stability prior to the crisis. before their trust is restored that the authorities are able to stop really bad things from happening. before they rebuild their relationships with their banks. on this final point, many companies were let down by their banks during the financial crisis, and i fear that many will be reluctant to return to a business model which relies on their banks providing liquidity and support in times of need. the reluctance today of some companies to borrow from their banks may be less a lack of demand and more a breakdown of trust. although an understandable response to the events of the past few years, an increased prevalence of self - insurance is not good for the efficient functioning of our economy. the scarring effects of the financial crisis and the uncertainty it brought with it, together with the fiscal consolidation and the weakness of the euro area, are likely to continue to weigh on the recovery over the next few years. yes : our economy appears to have turned a corner. and yes : there are good reasons for optimism that the recovery will persist. but we can ’ t take it for granted : there ’ s still a long way to go. and that sense of how far there is to go underpins the policy guidance provided by the committee earlier this year and takes us to our third and final question : what next for monetary policy? what next for monetary policy? the primary objective of monetary policy remains to hit

##ed bonds in banks and other financial institutions, which are expected to create a market for bonds, are affected by higher capital adequacy requirements than ordinary housing bonds. in the usa, as we know, securitisation of housing loans is a common occurrence, which is partly due to institutional reasons. in europe, housing finance has mainly taken other forms. if now emu leads to increased competition in the housing loan market, which should be an effect of monetary union, there will also be an expanded need to finance housing loans in way that is economical with capital. it is not unreasonable to believe that securitisation in this perspective will attract increasing interest. increased competition can accordingly drive forward a growing market for securitisation. however, the causal connection can also be the opposite, namely that improved opportunities for securitisation will increase competition. this is the experience in australia, where the housing loan market was deregulated in the 1990s. a legislation that facilitates securitisation reduced the previously high entry barriers which existed in the market, cleared the way for new players and reduced costs for the housing loan customers – in fact by as much as a couple of percentage points. some conclusions taken as a whole, we seem to be moving towards greater competition in the housing finance sector. new financing forms, new technology and possible emu membership are driving factors that will together reduce entry barriers and thus increase competition. since housing loans are standardised products, it is above all price which is the means of competition. the financing issues will thus be at the centre of interest. the traditional swedish form for housing finance where the entire balance sheet constitutes one body of collateral has many advantages. it is possible that the investors ’ demands for collateral in the form of equity may gradually make this form too expensive. a more developed market for securitisation may be one way of tackling this problem. it requires, however, assistance from the authorities in the form of a simplified regulatory framework. a well - developed market for gilt - edged bonds may also work in the same direction, but this also requires the approval of the authorities. a general reflection is that the financial innovations in a new market develop best if they are controlled by the wishes of investors and issuers. it is impossible to say what these wishes will be like in future. the role of authorities is to create a body of rules that provides scope for changes and preferably avoids locking the market into special structures or instruments. the swedish