independence, responsibility and decision - making powers of the riksbank and finansinspektionen. consultating and “ communicating ” risks are all very well, but in the long term we probably need something more than an advanced forum for discussion. this is why i believe that the macroprudential council is only a temporary solution. to become really effective, macroprudential policy needs to acquire the distinct status of an independent policy area with its own tools for promoting stability in the financial system as a whole. there are a number of factors that i believe are particularly important in order to create an effective institutional framework. 1. the power to make decisions. this presupposes a clear mandate and effective and clearly defined tools. however, as macroprudential policy is a policy area that is still under development, the legislation also needs to clarify how new tools can be added to the toolbox in the future. 2. independence. the body that is given responsibility for macroprudential policy should be free from external pressure, both from the political sphere and from the financial sector. i believe that this is particularly important, as macroprudential policy will entail making many unpopular decisions. 3. accountability. if a body for macroprudential policy is given a high degree of independence, it must also be made accountable for the actions it has taken – or ingves & lind ( 1996 ) : the management of the bank crisis – in retrospect, sveriges riksbank economic review 1996 : 1. see for example hallvarsson & halvarsson ( 2010 ) : the communication of the major banks and the authorities during the financial crisis 2007 – 1 july 2009. bis central bankers ’ speeches failed to take. this means that both the mandates and the tools must be clearly defined. for example, the mandate could include demands that the body must take action, or publicly explain why it refrains from taking action, when certain predetermined levels for key variables are passed. accountability would also be facilitated by demands for far - reaching transparency and reporting, for example to the riksdag. macroprudential policy is only a complement i have now expressed my heartfelt support for the need to make it possible to conduct effective macroprudential policy in sweden. however, i would like to conclude by referring back to what i said initially about having realistic expectations of what macroprudential policy can achieve. we can ask ourselves, for

activity was in turn reflected in labour market trends. the unemployment rate rose moderately in the first half of the year from 6 % at the end of 2008 and has stabilized at around 7 % since then. on the inflation front, consumer price trends in 2009 again did not fully mirror those in the euro area, converging only during the second half of the year when energy and food prices, which had risen sharply in the early part of the year, decelerated substantially. as a result, inflation in malta was lower than in the euro area for most of the last six months, partly compensating for the higher rates registered previously. in the context of an economic recession, malta ’ s public finances performed relatively well in 2009, although the country is still subject to an excessive deficit procedure. the deficit - togdp ratio declined from 4. 5 % to 3. 8 % in spite of an outlay of some 0. 7 % of gdp by way of targeted assistance to manufacturing firms and other stimulus measures. 1 to a large extent, however, the fall in the deficit ratio is explained by the presence of one - off expenditure items in 2008. 2 the general government debt ratio rose by around five percentage points to end the year at 69. 1 % of gdp, still below the estimated 78. 7 % euro area average. these developments helped to underpin confidence in maltese government bonds, which are primarily held by domestic residents. in fact, all the government and corporate bond issues launched in 2009 were oversubscribed, in spite of the fact that the issuance volume doubled compared with 2008. credit rating agencies have confirmed malta ’ s sovereign credit standing, with moody ’ s giving an a1 rating with a stable outlook. spreads over the german benchmark ten - year bond yield have remained stable over the past year at around 123 basis points. sources of economic resilience the relative resilience of the maltese economy is mainly attributable to four factors. the first is the adoption of the euro. the single currency has provided a valuable anchor during the intensification of the financial turmoil as malta did not have to carry the risks inherent in a small and vulnerable national currency. the threat posed by the financial crisis was further mitigated by the strength and stability of malta ’ s banking system. our banks benefited from an approach based on traditional intermediation between retail depositors and borrowers. their funding model, in fact, eschews reliance on wholesale markets.