market participants consider this commitment by the eurosystem to be credible. yields on long - term government bonds are at relatively low levels. these low levels reflect a high degree of confidence in the ability of the eurosystem to maintain price stability in the euro area over the longer term. in other words, both inflation expectations and the risk premia associated with inflation uncertainty are low at present, a situation that we wish to maintain. for the bond markets and therefore for companies financing themselves in the market, the high level of credibility attached to the eurosystem is highly beneficial. in particular, the fact that inflation risk premia are low means that companies as well as housing associations seeking long - term financing do not have to pay for the risk that the central bank may not be able to maintain price stability over the longer term. for the economy as a whole, this environment of low costs of long - term financing should be conducive for the private sector to undertake productive investments. companies can also take advantage of the longer planning horizon provided by the knowledge that the cost of capital they employ in their investments will remain stable. i do not have to tell you that this is also of fundamental importance in your sector, i. e. housing. for the last minutes i have focused on the developments in the european financial markets in general rather than what these developments specifically mean for you. i wanted to outline to you the european environment in which you will increasingly be operating. in europe, we are unquestionably moving towards integrated financial markets. clearly, this will have an impact on the financing of housing as well. i have mainly described general consequences and will leave it to you to draw your own conclusions about how this will affect the financing of housing associations.

pay any extra dividends. neither does the introduction of the leverage ratio look like being any great problem if the banks maintain current capital levels. we have looked more closely at the four major banks ( nordea, swedbank, handelsbanken and seb ) and, at present, none of them falls below the minimum requirement of three per cent. however, the swedish banks are finding it difficult to comply with the new liquidity requirements. the greatest challenge will probably lie in complying with the structural requirement. here, the banks have two alternatives – either cutting back on the commitments that require stable funding ( for example lending for housing purchases ) or exchanging shortterm funding for long - term funding. this second alternative could well result in the banks ’ funding costs increasing, which should push lending rates up somewhat. as yet, we have no exact figure on what this may cost in terms of basis points, but we assess that, despite everything, these costs will be small. bis central bankers ’ speeches how all this will affect the banks ’ customers is hard to say. in the final analysis, the question of how these costs will be divided among the banks ’ owners and customers is a question of competition. but, as we are now introducing regulations to reduce the risk of bankruptcies, i think it would be reasonable to assume that the banks ’ financiers will lower their expected return. effects on the real economy so what do we believe about the effects on the real economy? increased interest rate margins and reduced lending volumes will probably result in certain macroeconomic effects in the form of reduced gdp. how great these effects will be is hard to say. the basel committee has appointed two groups with the task of more closely examining both the direct and the long - term macro effects of the new basel regulations. 9 the results of their work do not indicate any drastic costs. they estimate that, during the actual implementation phase, sweden ’ s gdp level will be slightly lower ( approximately 0. 3 per cent ) that what it would be without basel iii. but, over the longer term, the new banking regulations will instead lead to higher gdp and prosperity – because we will reduce the likelihood of new crises. making exact forecasts is always difficult. however, it is helpful to have an estimate of the levels we are talking about. and, in sweden ’ s case, we can note that the costs for basel iii will not even come close to the costs of a crisis. for society as a