15 : more household debt than ever before ] finnish households have more debt than ever before. in parallel with this, total interest expenditure has fallen throughout almost the entire period since 2000. but now, interest rates on housing loans, too, have started to climb briskly, which narrows the consumption opportunities for many households. the high level of household debt has long been a central concern for the bank of finland in regard to financial stability. a majority of household debt – around three quarters – comprises housing loans and housing company loans. new housing loans are larger and loan periods are longer than before. indeed, more than one fifth of new housing loans are for more than 26 years. [ slide 16 : indirect risks to the economy may be greater than banks'direct credit risks from housing loans ] 5 / 8 bis - central bankers'speeches the bank of finland considers that in terms of financial stability, the stability concerns over household debt arise more through risks for growth in the economy in an indirect manner than directly as housing loan credit risks. higher interest rates, together with an increase in essential consumption expenditure and uncertainty in the labour market, could reduce the financial headroom for households. if debt - servicing becomes more difficult, households might reduce their consumption of goods and services. a contraction in consumption will then be reflected in the readiness of businesses to employ workers. this could add to bank losses from both corporate and household loans. currently, in spite of the decline in residential property prices, there are no signs of a rise in credit risks. the quantity of non - performing loans has remained low, and no growth in risk premia has been observed in bank funding. added to this, the capital adequacy and profitability of nordic banks are comparatively good. based on stress tests performed in recent years, the loss - absorbing capacity of nordic banks is at a good level to meet even a serious crisis in the real estate market. [ slide 17 : financial stability risks increasing – finland's crisis resilience at a fairly good level ] at the end of september, the european systemic risk board issued a warning about increased financial stability risks in europe. the purpose of the warning was to focus attention on the seriousness of the risks and to encourage all participants – and especially credit institutions and supervisors – to be prepared for any problems arising from the materialisation of risks. in finland the banking sector is an important financial intermediary for businesses and households. during downturns and disruptive situations in the economy, it is more

started reviewing its strategy six months ago and won ’ t be finished until early 2020. in our case, i ’ m sure there will be different views about certain aspects, but i hope that we will be able to agree on a common position in the end. will there be greater clarity in the future about what the medium - term inflation aim of “ below, but close to, 2 % ” means? some governing council members seem to think that levels of 1. 5 % or less would be acceptable, while others wouldn ’ t go much below 1. 9 %. you ’ ll have to be patient, we haven ’ t even really started discussing it. but i ’ d like to make another point here. the big question at the moment has to be why it is proving difficult to raise inflation. but there ’ s no question that the unconventional monetary policy measures have been successful. when we started taking those measures, there was a risk of deflation. that dangerous situation has been averted ; there ’ s no longer a risk of deflation. does the fact that inflation is low worldwide suggest that the aim should be lower? i don ’ t see any convincing reason to lower our aim. it ’ s also important not to confuse what ’ s happening now with what the medium - term aim should be. 4 / 6 bis central bankers'speeches but are you of the view that the ecb ’ s inflation aim is symmetric? bundesbank president jens weidmann said recently that the current formulation of the objective is not symmetric. there has always been symmetry in the implementation of our monetary policy – we have always acted decisively whenever inflation has shown signs of deviating from our medium - term aim. and it doesn ’ t matter whether it is too high or too low – we act with the same decisiveness. does that also mean that after years of inflation being below the objective, rates will need to be above the level of below, but close to, 2 % for a longer period? that will be part of our discussion of the strategy. there are also discussions about the relationship between monetary and fiscal policy. some people, including renowned experts, have been saying that the strict separation and the independence of central banks was the right approach when inflation needed to be dampened, but that more cooperation or even coordination is needed when inflation is too low. what is your view? monetary and fiscal policy are of course related and interact with one another. but that mustn ’ t affect the