than 46 percent for subprime, variable - rate loans. in fact, over the last several years, on average, mortgages held by community banks outperformed even fixed - rate, prime loans, the best performing mortgage category. i think this statistic by itself is a strong testament to the responsible lending practices of community banks. balancing regulatory costs and benefits community bankers tell us repeatedly that they didn ’ t engage in the problem lending that led to the recent crisis and shouldn ’ t be punished with expensive regulation. i think the data i have presented here support the first claim that their lending didn ’ t cause the problem. but crafting regulations to address the real problems that occurred in subprime lending without creating punitive burdens on community banks may prove to be quite difficult. in addition to the capital proposals that i discussed earlier, community banks will be affected by a number of provisions in the dodd - frank act, such as those covering escrow accounts for higher - priced mortgages, 16 loan officer compensation, and appraisal requirements. within the escrow requirements, the dodd - frank act did provide for an exemption for banks in rural or underserved areas, but i think broader exemptions for community banks should be considered. the definitions of qualified mortgages ( qms ) and qualified residential mortgages ( qrms ) could have a profound effect on the mortgage terms offered and the underwriting conditions for all banks. to the extent that these definitions constrain community bankers from using their experience with the cash flows from a small business customer or their knowledge of local real estate markets to customize a loan for an " irregular " situation, such loans may not be made. i do not mean to suggest that community banks are the only ones making good loans or that there weren ’ t any problems in small banks. but i do believe that the contribution of community banks to mortgage lending abuses was proportionately small and that an escrow account generally is any account that a servicer establishes or controls on behalf of a borrower to collect and pay taxes, insurance premiums, or other charges with respect to a mortgage loan. bis central bankers ’ speeches problematic practices in smaller banks can be addressed through on - site supervision. and i also believe that many community banks simply do not have the resources to appropriately comply with all of the pending regulatory changes pertaining to mortgage lending. thus, the cost of solving the problem falls disproportionately on them. conclusion : a separate set

for a long time, we have expected a krona appreciation that over the course of the forecast period would bring us to levels approximately in line with what we believe to be appropriate in the long term, given mainly the competitiveness of the swedish economy. during the period 2002 - 2003 as a whole, the krona strengthened roughly as expected. recently, however, this strengthening has been curbed. one reason for this appears to be expected relative interest rates, where there has been a certain shift since the autumn. there may be reason to take this into account and expect a somewhat lesser probability than before of a krona appreciation. on the whole, this discussion of different uncertainty factors and risks does not lead me to see reason to make any appreciable changes to the assessment i have just presented. the risks i have discussed could perhaps push up inflation somewhat. nevertheless, with what we know today, the conclusion remains that inflation will be below the riksbank ’ s target one to two years ahead. by way of conclusion, allow me to stress that much work remains to be done before the next inflation report is published and it is this that will form the basis of our decision about the repo rate at the end of march. so it is not just today ’ s assessment that could be affected by new data. in the light of the analyses currently being carried out, the executive board may assess some of the factors that are significant for inflation in a different way than i have today. thank you.