the bargaining rounds were good. wages had increased moderately in the preceding years and there was spare capacity on the labour market. secondly, wage formation had improved since the crisis at the beginning of the 1990s. thirdly, the monetary policy framework had improved and thereby the conditions for maintaining low and stable inflation. the public's expectations were that inflation would be around the target of 2 per cent per year. at the same time, my assessment was that the risks were on the " upside ", that is that it was possible that wage increases could be higher. there was strong growth in the economy and employment was increasing rapidly. despite the positive experience of the preceding years, there was a possibility that the rounds of collective bargaining could be much less straightforward than expected. market forces could also push up the rate of wage increases to higher levels. i became more concerned when the content of the agreements became apparent. the levels of the agreed wage increases were significantly higher than in the preceding rounds of collective bargaining. the outcome was similar to the risk scenario that we presented in a monetary policy report in february 2007 before the collective bargaining process began. this undermined the possibility to conduct a relatively expansionary monetary policy with low interest rates and still reach the inflation target. somewhat higher wage increases in 2007 - 2009 than in the preceding agreement period in february 2007, the riksbank's assessment was that hourly wages would increase by 3. 9 per cent per year in the three - year period 2007 - 2009. when more information on the result of the rounds of collective bargaining became available in june 2007, this assessment was increased to 4. 2 per cent per year. my personal belief was that hourly wages would increase more than this. since the spring of 2007, the development of the economy has been much weaker than we expected. the crisis on the financial markets has entailed a dramatic downturn in the us economy which has had a dampening effect on economic development in other countries, including sweden. this can in turn have made the companies more cost conscious and less willing to employ new personnel and increase wages above the levels stipulated in the agreements. it is therefore reasonable to assume that there will be lower wage increases during the threeyear agreement period than we could predict in 2007. our assessment now is that hourly wages will increase on average by 3. 7 per cent per year during the three - year period 20072009 measured using the national mediation office's method for presenting statistics, and by three tenths more using the method

causing problems for both the real economy and financial stability. this may make it more difficult for the riksbank to perform its tasks. there are therefore good reasons for the riksbank to care about household indebtedness. the analysis to date has been based on limited data the debate on whether the level of household indebtedness is sustainable or not has to date been based on partly inadequate data. in recent years, the analysis has largely been based on aggregate data on the households ’ assets and liabilities from statistics sweden ’ s quarterly data. 5 however, over the last four years it has also been possible to some extent to base the analysis on the annual mortgage survey conducted by finansinspektionen, in which information on randomly - sampled new borrowers and some aggregate data are gathered from the banks. however, the random samples in the mortgage surveys only cover a limited period and only refer to new loans. the random samples thus only represent only 1. 6 per cent of the debts of the household sector. consequently, they do not provide a comprehensive view of the situation in the loan stock, that is for existing loans. as the information on the loan stock presented in the surveys is at the aggregate level, it is also not possible to analyse, for example, the distribution of debt ratios. in november 2013, the findings of a government inquiry, “ over - indebtedness in a credit society ”, were published. the data in the inquiry was partly based on new information from the swedish enforcement authority and from uc, a credit information agency. however, the data constituted only a cross - section of the households ’ debts and thus did not enable an analysis of how debts had developed. all in all, this means that existing sources of data do not provide a complete picture of household debt, and that the discussion of the risks associated with household indebtedness has so far been based on limited material. the riksbank ’ s credit data an important piece of the household - debt puzzle in order to be able to perform better analyses of household debt at the individual and household levels, the riksbank therefore decided in the summer of 2013 to gather credit information on all of the borrowers of the eight largest banks. 6 this information covers all the international studies have shown that a substantial build - up of debt can increase the probability of financial crises and of falls in housing prices, as well as exacerbating the effects if a crisis does occur. see