of work underway to achieve this at the moment. the action plan for financial services adopted by the eu countries is aimed at solving many of the legal problems, in order to give the securities markets common ground. the 40 or so legislative proposals taken up in the plan should come into force by 2005. in an attempt to hasten this process, the lamfalussy committee has illustrated how legislation in the financial field within the eu could be adapted more simply. the committee also identified a number of areas in the action plan that ought to be given special priority. the committee's proposals were approved at the eu summit meeting in stockholm in the spring, and the first proposals for directives are now being discussed. i would like to emphasise the importance of this work. well - formulated, flexible legislation is necessary to enable the financial sector to provide a positive contribution to economic growth. this is made through enabling payments to be made more cheaply, risks to be distributed better and savings to be more easily channelled into profitable investments. the comparison with the usa also indicates that there is great potential to be realised in this respect in europe. the securities market has particular importance in this context. firstly, as we have seen, the securities markets have gained greater importance as sources of financing for companies, both with regard to risk capital and borrowed capital. their significance for savers is growing correspondingly, which is clearly illustrated by the rapid development in households'mutual fund savings. as the markets develop they, and more specifically pricing on them, also take on greater significance with regard to resource allocation in society. in other words, improved measures are extremely important. the role of the euro in sweden after this glance at what is happening on the euro markets, allow me to turn to the role of the euro in sweden. i intend to begin with the effect on the securities markets and move on to euroisation and competition. what has the euro meant to the swedish securities markets so far? my view is that it has so far had relatively little effect. we should remember that developments on these markets are primarily influenced by globalisation and technological developments. and as elsewhere, this has led to frantic activity in consolidation and improving efficiency. within emu the introduction of the euro has clearly hastened this process, but in sweden the euro's influence is of a more indirect nature. the euro market exists as an important alternative, and can thus be said to sharpen competition on the swedish securities markets through its mere presence. it first

not believe anyone expected a situation like the one we had when gdp fell by 5 per cent in 2009. during the financial crisis several central banks were forced to cut their policy rates to close to zero. this has entailed restrictions on future decisions, as the nominal interest rate has a lower bound. the classical argument in favour of this lower bound is that the nominal interest rate on cash is zero, and that a negative interest rate would mean that economic agents would hoard banknotes. there are many discussions in the academic world as to whether the lower bound lies at zero or slightly below. 5 i will not go in to it here, but merely note that a majority of us on the executive board has regarded the current repo rate as in practice being the lower bound. this zero interest rate problem received much attention in the academic world in connection with the japanese central bank cutting its policy rate to zero as a result of the economic stagnation in the 1990s. one of the possible solutions if a central bank has cut its policy rate to its lower bound, and wants to cut it further, is to promise a policy rate around zero for a long time to come. over time this would have a similar effect to cutting the interest rate to below zero and then raising it to above zero. the repo rate path facilitated communication during the financial crisis, lessons from this research became surprisingly topical for a number of countries in addition to japan. the repo rate path fulfilled a central role here, as it enabled the riksbank to make clear its intentions for monetary policy during an uncertain situation. when the riksbank cut the repo rate to 0. 25 per cent in july last year, the repo rate path signalled a low repo rate for a long period ahead. i believe this gave us an advantage over many other central banks, who tried to use purely verbal methods to signal that their policy rates would be low for a long time. credibility plays an important role in monetary policy. one central issue in this context is the inflation target. if a central bank “ promises ” low inflation, but the economic agents do not find this credible, it will not have the desired effect. it is possible to inspire confidence in the inflation target by the central bank being politically independent. what does this have to do with the zero interest rate problem and the repo rate path? what i mean is that the existence of a repo rate path in connection with cutting the repo rate to 0.