may also be problematic for several reasons. the riksbank ’ s repo rate is and should preferably be a blunt instrument that affects the entire economy, that is the households, the companies and the financial markets. it is not desirable for monetary policy to have a disproportionally large impact on a limited part of the economy, in this case on the indebted households. one should not expect that monetary policy will always be designed so that it is well balanced for just this particular part of the economy. this is exemplified by the monetary policy of recent years in which the repo rate has been set lower than justified by developments on the mortgage market. in the future, we may well end up in the opposite situation with the repo rate being set higher than justified by this particular part of the economy. longer fixed - rate periods desirable it is difficult to determine how large a proportion of variable interest rates is desirable in an economy, but i suspect that we have gone too far in that direction in sweden. and by this i mean from the point of view of systemic risk. for an individual household there may be good reasons for choosing a variable interest rate, but for the economy as a whole it would probably be good if we could limit the proportion of variable rates. this can be achieved in different ways. in some countries, regulations have been used to either limit how large a proportion of the mortgage may have a variable interest rate or how much a variable interest rate may increase during the maturity of a mortgage. in other countries, long fixed - rate periods have become the norm without the need for regulations. the fact that this has not happened in sweden indicates that the financial markets are not working well enough for some reason. this may, for example, be due to the lack of a market for mortgage bonds at really long maturities, or of regulations concerning how mortgages with long fixed - rate periods can be paid off prematurely. limit the build - up of debt despite the need to stimulate the economy i would also like to say something about the interplay between current monetary policy and measures to mitigate the risk factors i have mentioned. is it really justified to introduce measures that may dampen household consumption or activity on the housing market when the riksbank is at the same time trying to stimulate the economy in order to increase several studies based on household data from the financial crisis of recent years show that highly - indebted households reduced their consumption more than households with low debts (

the time. so i cannot tell you when and, more importantly, how rapidly our rate target will rise. i will share an observation, however. the economic outlook can change rapidly, and judgments about appropriate policy need to respond accordingly. it ’ s not hard to find historical examples : the outlook for real activity shifted dramatically from late 1998, when overseas turmoil was thought to jeopardize u. s. growth, to early 1999, when it became clear that the effects would be minimal and activity was accelerating. similarly, the outlook for growth and inflation shifted significantly from mid - 2003, when inflation seemed to be sinking below 1 percent, to early 2004, when growth and inflation were clearly rising. arguably, the fed fell at least somewhat behind the curve in each case. the lesson, i believe, is that policymakers should strive to look through clearly transitory phenomena to assess the underlying real economic developments that – as long as inflation is anchored – determine the appropriate path for interest rates. and they need to be prepared to respond promptly. bis central bankers ’ speeches