foreign exchange banks in the world are taking part in this project, with the aim that a joint system will settle all of the members ’ foreign exchange transactions. this will enable payment in one currency to be made directly against payment in another, which will entail the credit risk that arose earlier disappearing. it in a broad sense has, of course, also been necessary for the security of the systems for large payments that central banks around the world develop or oversee, where the trend in recent years has been towards real time gross settlement. our own rix system is an rtgs system, as is the target system used by the ecb. i would be happy to discuss this, but it would involve a deviation from my subject here. conclusion in conclusion, i would like to make two reflections. firstly, it is of course the case that it, while increasing both the efficiency and security of the financial system in general and the payment system in particular, also increases risks of a purely operational nature. operational risks were strongly in focus prior to the new millennium, particularly in the financial sector, and extensive preparations were made to guard against them. with hindsight, it is easy to talk about making a mountain out of a molehill, but the lack of problems was of course largely due to the fact that they had been foreseen and due precautions taken. one positive consequence of all the fuss around the new millennium was that openness regarding security and it was increased and that attention was drawn to the need for routines to manage crises. at the same time, it can also be concluded that the it systems proved to be fairly robust. the consequences of the terrorist attacks in the usa on 11 september last year could actually be handled to a large extent as there were security arrangements for most of the central financial systems. however, these events emphasised the importance of taking into account such potential threats as terrorism and other physical threats to the financial system when establishing security routines. my second reflection is of a more human nature. after having given a whole speech on it in the financial sector it is easy to give the impression that the banks and other institutions operating on the financial markets consist merely of technology and money. that is not the case. fundamentally they are not about technology or money, but about people and the relations between people. all successful managers of financial companies, particularly bank managers, are aware of this. technology is a useful aid, but a customer who does not receive a respectful, personal and competent reception at one bank

to see housing as a financial asset, as opposed to somewhere the buyer intends to live. these countries have so - called buy - to - let markets, which involves buying a second house or apartment with a view to letting it. buyers hope that the property will rise in value in much the same way as a share, yielding a return in the process. in dublin the situation has got to the stage where rents have dropped in recent years, which should have resulted in falling house prices. but prices have continued to climb. it is likely that a number of markets contain elements of a speculative bubble, where price developments bear no relation to the fundamental factors that normally affect supply and demand and instead are driven by expectations of future price increases. commercial property prices in sweden at the beginning of the 1990s gave us a clear example of how such a market works. in sweden we don ’ t see any indications that speculation is of any great significance for the formation of housing prices. i think there ’ s reason to wonder whether such imbalances really can arise in the swedish market. swedish people live in their houses or apartments. perhaps the swedish tax system, both as regards property tax and tax on rental income, has made it unprofitable for households to buy to let. australia, for example, has considerably more favourable tax rules. so, to sum up, it seems that both housing prices and household borrowing in sweden are fairly well explained by the fundamental factors that usually govern supply and demand. this doesn ’ t mean of course that prices cannot fall ; far from it. uncertainty about income developments and rising interest rates could, for example, curb demand at the same time as the supply increases when the construction of new homes picks up. in that case we should expect weaker price increases or even a drop in prices. but the prices shouldn ’ t fall as much or as fast as when demand contains obvious elements of speculation. financial stability so what is the outlook for the stability of the swedish banking system? what would happen if unemployment or interest rates were to rise? would we see a fast increase in the banks ’ loan losses as during the banking crisis? we have concluded in several financial stability reports that there indeed is cause for vigilance as regards developments in household debt, but that we don ’ t believe that these developments are a threat to the stability of the banking system. there are several reasons for this. one is that just mentioned, namely that we don ’ t see any obvious speculative tendencies in the housing