##notes and coins. this would in total involve a period of between two and three years from a referendum until the introduction of the euro is complete. however, i believe that this period can be shortened somewhat, assuming that the political process openly and clearly chooses a transition process and establishes a timetable for the different stages. it is worth remembering, in this context, that there is no reason why a cash changeover should have to be made at the start of a year, for practical reasons it would be better implemented in march or october. another alternative described in the report is known as " big bang ", i. e. to begin a cash changeover at the same time as the krona exchange rate is fixed and full membership of the monetary union occurs. this scenario requires a preparation period of 2 - 2. 5 years. this makes the demand that the euro can be handled in all transactions in sweden, both physical and electronic, and by everyone in sweden, from the corner tobacconist to the national swedish social insurance board and the major banks from the first day of membership. as this alternative involves a simultaneous changeover in it systems, other practicalities such as accounting and payment of taxes, as well as a physical cash changeover, it makes high demands on co - ordination and information. taking into account the longer preparation period prior to the actual emu membership required in this alternative, it would take longer until sweden could fully participate in all forums for co - operation and decision - making within the monetary union than would be the case with a gradual transition process. the advantage of this scenario is that it would avoid uncertainty arising among the general public over the position of the euro during the transition period in that the euro could be used everywhere immediately. it has not yet been established what kind of transition scenario we would have in sweden. nor is it yet clear how much time would be required, partly because the political process has not yet chosen a transition scenario and partly because changes are constantly being made in operations and it systems that affect the time required for a potential transition. examples of measures that reduce the time required for a potential membership are that it systems that are being modernised for other reasons are designed to also process euros. within the riksbank we are working on reducing the length of time calculated as necessary for the production of swedish euro coins. the result of our preparations and those of the financial sector are reported, as i mentioned earlier, in regular progress reports. number 8 will be published in may.

during the crisis of the 1990s. despite this, i believe that there are two reasons for questioning the low risk weights for mortgages. the first reason relates to a possible reason why loan losses in sweden have historically been low ; namely that in times of difficulty the public sector has helped maintain the household sector ’ s debt - servicing ability through the swedish social insurance system. in practice, this means that when the household sector ’ s debt - servicing ability is shaken, it affects firstly the individual, secondly public finances and only thirdly the lenders. this could mean that the banks lack an incentive to fully take into account the risks entailed in excessive credit - granting and high loan - to - value ratios. to put it another way, the risk weights we currently have for mortgages may be “ correct ” from the banks ’ business point of view, but they are potentially too low in society ’ s broader perspective. the second reason for questioning the risk weights is that they are backward - looking. and as we all know, history doesn ’ t always repeat itself. this is one reason why i am concerned, despite the riksbank ’ s own stress tests showing that the swedish banks would not suffer particularly large loan losses, even if the situation in the mortgage market worsened significantly. one can ’ t help wondering whether it is reasonable that sweden ’ s risk weights are among the lowest in europe, while our households are among the most indebted. and their debts are increasing. i don ’ t think it is reasonable. and consequently i think that from the authorities ’ point of view we need to discuss whether the level of the risk weights is reasonable or whether it needs to be raised – perhaps by establishing a floor for the risk weights the banks use when calculating their capital adequacy. the third priority concerns ensuring that public authorities stand ready to use the tools we currently have at our disposal to cool down the mortgage market. finansinspektionen has already taken a stand by introducing a cap on the loan - to - value ratio. on our part it would involve using our possibility to require that the banks hold reserves with the riksbank. by linking the size of the minimum reserve requirement to lending to the housing market, lending to mortgage customers would become relatively more expensive than lending to other the risk weight of a loan is the risk that the borrower will not be able to meet his or her obligations. minimum capital ratios are set in relation to the total loan multiplied by