this so far? i will go through each of these points, but let me first add that i am expressing my personal reflections here, well aware of the fact that it can be difficult from a distance to reflect over events when you are right in the middle of them. it is possible that my colleagues in the executive board of the riksbank agree with much of what i say, but it may also be the case that they have a different opinion in some issues. 3 it may be worth noting that sweden, together with countries like australia, new zealand, canada and norway, belongs to a group of small open economies with floating exchange rates and inflation targets that have relatively similar challenges and problems : via free capital movement, we have imported low real interest rates, there is downward pressure on inflation via, among other things, globalisation, private debt is high and there are problems on the housing market. 2 when you have to choose between “ leaning against the wind ” and the inflation target one of the conclusions from the global financial crisis is that financial factors and conditions must be given higher priority in economic analysis and be considered to a greater extent when designing economic policy. above all, the crisis was a signal that greater effort must be made to avoid financial imbalances causing problems on the macro level. the most concrete expression from this was the emergence of macroprudential policy, which, in contrast to traditional supervision of individual banks and financial institutions, focuses on the entire financial system and the economy as a whole. 4 some of the discussion has been about the extent to which monetary policy should be used to counteract the build - up of financial imbalances, for example a substantial and sustained credit expansion. a monetary policy that “ leans against the wind ” may contribute to greater stability in the longer term, as the purpose of trying to prevent financial imbalances from building up is that they should not cause problems with financial or macroeconomic stability at some point in the future. most people agree that monetary policy should not have the main responsibility for preventing financial imbalances, but that this should rest on micro - and macroprudential policy and a well - designed regulatory framework. a central issue is, however, what support to prudential policy and the regulatory framework monetary policy needs to provide so that they can fulfil their tasks. 5 i do not believe it is possible to completely ignore financial stability when conducting monetary policy. different views in research and among central banks there is on the one

prices, and for japan, long - term and stable employment as well as a robust supply system. although vaccines have been rolled out, it will likely take some time for the pandemic to end. i am sure that both economies will overcome this shock through the high adaptability of firms. ii. climate change issues in addition to the pandemic, the global economy has another important common challenge that needs to be addressed, which is climate change. since the industrial revolution began in the mid - 18th century, advanced economies have built mass - production, mass - consumption societies through the extensive use of fossil fuels such as coal and oil, and they have achieved wealth and prosperity. considering that this carbon - dependent growth model was established over the past three centuries, transforming the model into a decarbonized one in less than three decades is a challenging task. the government and the private sector therefore need to make a concerted effort. central banks also have a role to play in addressing this challenge. the reason is that climate change may have an extremely large impact on developments in economic activity, prices, and financial conditions from a long - term perspective, and therefore it is relevant to central banks'mandate. as is widely recognized, due to what economists refer to as " externalities, " this challenge cannot be addressed through the market mechanism alone and the public sector's intervention is needed. in addition, there are growing expectations for the financial sector to play its part, since a transition to a decarbonized economy will require not only a large amount of capital and r & d investments over a long period but also the financing of those investments. against this background, the bank has recently decided to introduce a new operation to provide funds to financial institutions on favorable terms against various investments or loans they make to address climate change. i hope this new operation will serve as a catalyst to boost private sector efforts to address climate change. in order to achieve the ambitious goal of carbon neutrality in less than three decades, working hand in hand and sharing ideas are more important than ever for the business communities of the u. s. and japan, which are the world's largest and third largest economies in terms of gdp. shibusawa eiichi, who i mentioned at the beginning, was engaged in establishing nearly 500 firms in the early days of japanese capitalism. his level of entrepreneurship will be needed more in a changing economic society in the post - pandemic era. i hope that the lively exchange of