the crisis has reignited the debate of whether central banks should “ lean against the wind ” and use monetary policy also to prevent the build - up of asset price bubbles. this debate is still ongoing. and as usual, the riksbank has been at the forefront of it, with regard to both policy invention and implementation. the riksbank started to tighten monetary policy in 2010. initially, the concern was rising consumer prices. but attention soon shifted to high levels of household debt, which were perceived to present a vulnerability to the wider economy. to mitigate this weakness, monetary policy continued to tighten. this decision was not uncontroversial at the time. then deputy governor svensson argued that it was the job of macroprudential policy, not monetary policy, to deal with debt vulnerabilities. he voiced his concern that monetary policy was too blunt a tool for mitigating financial stability risks, and that doing so would cause macroeconomic performance to suffer. and indeed : while household debt was not curbed significantly, inflation dropped below target levels and unemployment started to rise. 2 / 4 bis central bankers'speeches what is the takeaway here? for me, it is first and foremost that moving monetary policy into uncharted territory will trigger debate. in my opinion, this is something not to shy away from, but to welcome and embrace. for it is only when we openly and constructively debate our differences that progress is possible. this episode thus speaks to the strength of the riksbank as an institution. when it comes to wider implications for monetary policy, it seems to me that the lessons are actually less clear than what immediately meets the eye. yes : when it comes to handling financial stability risks, monetary policy is a sledgehammer rather than a scalpel. macroprudential policy should be the preferred choice of tool, and getting it ready for use has to be a political top priority. however, the effectiveness of many instruments has not been confirmed in practice. and since applying these instruments could mean, for example, that it becomes harder for some to qualify for a mortgage, policymakers might be reluctant to use them. in order for monetary policy to fulfil its mandate and to ensure clear accountability, it ’ s important that price stability remains the primary objective of monetary policy. but that is not to say that when it comes to monetary policy and price stability there are no lessons to be learned. as we have recently witnessed, financial crises have a

considerable impact on the monetary policy transmission process, and monetary policymakers ’ ability to guarantee price stability and price developments as such. financial crises almost always originate in excessively loose bank lending. 3 the last crisis was no exception. confining monetary policy to mopping up when the milk is already spilled creates an asymmetry. in my opinion, a symmetrical monetary policy that takes into account money and credit growth and that is oriented towards the medium term seems most conducive to price stability. just to be clear : i am not arguing in favour of a monetary policy that strictly targets money growth. but i do suggest that money and credit developments provide valuable information to monetary policymakers. in principle, this is already the basis of the eurosystem ’ s two - pillar strategy. 4 e - krona finally, a project where the riksbank seems to be even more ahead of the pack is digital central bank money. developments in this field have been dizzying. we have had to familiarise ourselves with new concepts, including at least the basic intuition of the blockchain, and, not to forget, a host of buzzwords. and whereas minting coins in the 17th century required quite a bit of metal, as i pointed out at the beginning, mining crypto token can require quite a bit of energy — a single bitcoin transaction, for example, uses up to 900 kilowatt hours of electricity ( in april 2018 ), enough to power a four - person household for two months. separating hidden potentials of new technologies from the hype and excesses is challenging, often arduous. the effects of digital central bank money on the payment system will not be the only consideration for central banks, however. depending on its concrete design, digital central bank money would provide non - financial corporations and even households with access to the central bank balance sheet. evidently, cash allows this, too. but unlike cash, digital balances have no noteworthy storage costs. 3 / 4 bis central bankers'speeches allowing the public to hold claims on the central bank might make their liquid assets safer, because a central bank cannot become insolvent. this is a feature which will become relevant especially in times of crisis – when there will be a strong incentive for money holders to switch bank deposits into the official digital currency simply at the push of a button. but what might be a boon for savers in search of safety might be a bane for banks, as this makes a bank