also well capitalised from an international perspective. 15 households, unlike the large listed companies, have a separate disposable income that mainly consists of wages and that can be seen as return on the household ’ s human capital. households ’ human capital is not included in the normal balance sheet for households. to assess the value of human capital one can conservatively take the present value of 20 years of disposable income ( many young households will work for a much longer period ). with a 5 per cent interest rate after tax and a disposable income that grows by 4 per cent the current value of this will be roughly 1 800 per cent of disposable income. the average remaining bis central bankers ’ speeches households ’ interest payments on their debt is not high from an historical perspective. at present, it is just over 4 per cent of disposable income. with a high mortgage rate of 7 per cent before tax, the mortgage rate after tax will be around 5 per cent. with an interest rate after tax of 5 per cent, the interest payment will be 5 per cent of 170 per cent, which is 8. 5 per cent of disposable income. this is not particularly high, especially in comparison with the cost of renting a home, which can be on average 20 per cent of disposable income. when assessing whether households ’ debt ratio of 170 per cent in relation to disposable income is sustainable in the long run, however, the most relevant indicator is the households ’ net debt service, that is, the debt service households must pay to keep the debt ratio constant. then it is necessary to take into account the fact that disposable income increases over time. with a disposable income that can be expected to grow by 4 per cent in the long run, therefore, 4 per cent should be deducted from the mortgage rate before tax of 5 per cent. there then remains only 1 per cent of the debt of 170 per cent, that is, the net debt service required in the long run to keep the debt ratio constant is only 1. 7 per cent of disposable income. 16 with this reasoning, a debt ratio of 170 per cent is sustainable with a considerable margin. figure 3 capital over assets for households, some large listed companies and swedish banks per cent sources : dagens industri ( capital / assets 2011 for listed companies and swedish banks ) and the riksbank ( household

mr heikensten reviews policy developments and changes affecting sveriges riksbank, and assesses the current situation and outlook speech by mr lars heikensten, first deputy governor of the sveriges risksbank, at the autumn conference centre for business and policy studies on 12 october 1999. * * * the autumn conference, arranged by the centre for business and policy studies, is a tradition i have come to enjoy and an opportunity of looking back on the course of monetary policy and considering future challenges. my review last autumn began with the observation that a good deal had happened as regards economic developments and the conditions for monetary policy. much the same applies on this occasion. two years ago we were in the throes of what looked like being a strong cyclical upswing with attendant price increases. my remarks at the autumn conference caused short interest rates to move up about 0. 10 percentage points in expectation of a tighter policy. little more than a month later the riksbank did in fact raise the repo rate. last year the situation was very different, with an international financial crisis and great uncertainty about its effects on the real economy. the krona had become markedly weaker and there was some discussion at the conference about the riksbank ’ s recent currency market intervention. later that autumn the riksbank reduced the repo rate in two steps. today the prospects for growth and employment are bright again and the krona is substantially stronger. the debate is focussed once more on the risks of overheating. the setting for our activities is evidently liable to change at short notice. i shall begin, as usual, by talking about what has happened since we last met and commenting on the public debate. one of the changes this time has to do with the set - up for the riksbank. new legislation from the beginning of this year has given the riksbank a more independent status and a new managerial structure. so i shall also be saying something about the new conditions for the riksbank ’ s communications. finally i shall be looking ahead and commenting on our appraisal of the coming years. in doing so i shall consider a matter that has attracted a lively discussion recently : has the trade - off between growth and inflation in sweden changed? this is an issue we have had to consider carefully in recent years. 1. monetary policy in the past twelve months weaker international course in the wake of the crisis the international financial markets were very turbulent last autumn after russia ’