is introduced? and what part does emu play in this context? one important factor in the process of industrialisation in the late nineteenth century, when sweden was transformed from poor country into a wealthy nation with almost the world ’ s highest growth rate, was the contemporary development of the financial system. banks were established and financial know - how grew when interest controls had been abolished. as a result, inventions could be exploited and investment in the nascent industries could be financed. a mounting body of research findings published in the 1990s indicates that economic growth in various countries is appreciably affected by how the financial system works : the more highly - developed the financial system, the greater the stimulus to economic growth. an accessible banking system and efficient financial markets contribute to the development of investment and thereby to the economy ’ s growth trend. one conceivable reason why the us economy is being transformed more rapidly than is the case with sweden and, even more so, the european community, is the efficiency with which the us financial system works. corporate financing may well be facilitated by the breadth and liquidity of diverse financial markets. with the rapid development of information technology, moreover, a new type of company has emerged. it differs from the traditional pattern in that its operations involve highly mobile human capital. the financing of these companies accordingly imposes different requirements in markets for risk capital and loans. the us markets for risk capital appear to be more highly developed and more focused on the financing of high - risk projects than seems to be the case in europe, where bank loans predominate and a larger proportion of financing goes to reliable, established firms. with the advent of the euro, the financial system in europe may become more developed and, like its counterpart across the atlantic, offer more alternative forms of financing. with a single currency in the euro area, the capital markets will gradually become more liquid and thereby more efficient. there will probably be more corporate financing with bonds and equity, forms of financing that are less common at present in europe than in the united states. signs of this are already evident. there is reason to make a deeper analysis of the financial system ’ s contribution to the changes that are needed in the swedish economy. the introduction of a single currency may come to play a more important part in this transformation in that it influences the development of europe ’ s financial system. this is an argument in the discussion about emu that i have not encountered hitherto. conclusion sweden has already come a long way

did not involve a risk of an overly rapid increase in the rate of inflation later on. at the beginning of 2006 we began a phase with increases, which continued in 2007. the policy was expected to contribute to inflation being below the target during a relatively long period, to then be around 2 per cent, measured in terms of the cpi, during 2007. underlying inflation, the cpix, was expected to be around 1. 5 per cent. the inflation outcome was close to these forecasts – at 2. 2 and 1. 2 per cent respectively. as i just observed, one cannot rely too heavily on individual forecasts. but i cannot deny that it, psychologically at least, feels far more satisfying than if we had been further away. but, naturally, the actual assessment of how well we have managed is the responsibility of the committee on finance. and the committee ’ s initiative to the independent material for assessment that we have now published will hopefully make it easier to examine our work. i hope it will contribute to a good discussion on monetary policy. thank you! the goal for monetary policy 2 per cent ±1 percentage point why? create the best possible conditions for sustainable economic development! monetary policy at present … the repo rate was raised by 0, 25 percentage points to 4, 25 per cent repo rate around 4, 25 per cent over the coming year the view of the future repo rate largely the same as in december inflation above target annual percentage change. broken lines refer to the riksbank ’ s forecasts. cpi cpix - 1 - 1 sources : statistics sweden and the unit labour costs for the economy as a whole annual percentage change, seasonally adjusted data unit labour cost hourly labour cost productivity - 1 - 1 sources : statistics sweden and the rik b k weak gdp growth in the usa in 2008 consensus and the riksbank ’ s forecasts for gdp growth in the united states in 2008 at different points in time 4. 0 4. 0 the riksbank 3. 5 3. 5 consensus 3. 0 3. 0 2. 5 2. 5 2. 0 2. 0 1. 5 1. 5 1. 0 1. 0 0. 5 0. 5 0. 0 0. 0 jan feb m ar apr m ay jun jul aug sep oct nov dec jan feb sources : consensus economics inc. and the riksbank monetary policy considerations financial turmoil high cost pressures – inflation above the target subdued growth in the united states the interest