important for efficiency. central banks generally have several objectives. the responsibilities of sveriges riksbank, for instance, are laid down in legislation as maintaining price stability and promoting a safe and efficient payment system. economic research has indicated that accountability is crucial for achieving the goal of price stability. while accountability should produce similar benefits for the other objectives of central banks, this is still very much an unexplored issue. as regards financial stability, one probable reason for this is that it is much harder to define financial stability than price stability. another may be that the central bank seldom has sole responsibility for financial stability, sharing responsibility instead with the ministry of finance. a clear division of tasks among the authorities is important for producing accountability. in sweden, a large part of the responsibility for financial stability has been delegated to the swedish financial supervisory authority. the riksbank and the swedish fsa recently signed a so - called memorandum of understanding which outlined the responsibilities of the two authorities in the area of financial stability. the aim of this is to facilitate co - operation and increase efficiency in the work of each authority towards the common objective of financial stability. according to the riksbank, the three most important factors for financial stability are the soundness of the financial institutions, contagion, and the efficiency of the financial infrastructure. the main role of the fsa is to ensure that institutions operating in the system are sound. the riksbank, on the other hand, is responsible for the oversight of systemic risks and the efficiency of the infrastructure. this framework, however, should be open to question. for example, it might have to be altered in order to accommodate changes in the financial system. it should also be developed as our knowledge of the functioning of the financial sector increases. with financial companies operating in several countries, the division of responsibilities among authorities in different countries will become an important issue. in europe, a process has begun to line up a division of labour between central banks and other authorities as well as between the national central banks and the ecb. for the new structure to be efficient and stable, it is important that the roles and objectives of different actors are well defined. there are risks inherent in this process, however. the new system may prove too bureaucratic, stressing stability at the cost of efficiency. also, it is important to prevent turf wars from dominating rational discussions about new challenges. not only is it important that the objectives of central banks are clear. it is also vital

that the necessary means are available and can be applied. the advantages of delegating monetary policy to an independent central bank have been analysed fairly extensively in academic research. the main argument for delegation is that politicians can avoid the temptation to use monetary policy for short - term stimulation of output and employment. the collective experience of previous years - and from academic research - is that such stimulation often runs the risk of leading to wage - price spirals, which in the end can have severe implications for welfare in society. a parallel argument can be made concerning policy for financial stability, although it is still a rather unexplored topic in economic literature. by delegating the lender of last resort function to the central bank, and making it clear that the central bank will not support insolvent banks, the politicians can avoid the temptation to use central bank funds to bail out banks in financial difficulty. another reason for giving the central bank formal operational independence is that only then can the executive board of the central bank be made fully accountable for the bank's operations, and as i have said already, accountability is a crucial means of attaining efficiency. transparency accountability is intertwined with the issue of transparency, not only through clearly defined objectives, but also through actions. a central bank should be clear about which actions are being taken and for what reasons. most people agree that central banks should do their best to minimise uncertainty over policy actions, as this will make policy more efficient. as my colleague mervyn king said, if monetary policy becomes so undramatic and predictable that it is boring, then we will really have achieved a low level of policy uncertainty! the issue that remains open to debate is which information should be published and when. at the riksbank, we have chosen to publish our inflation forecasts four times per year and to publish edited minutes of the executive board meetings, where interest rate decisions are taken with a lag of about two weeks. while we strive to be as open as possible, there are of course limits. one of the most important is determined by what we know about the functioning of the economy and the effects of monetary policy. not everyone agrees, however, that transparency is a good thing for attaining financial stability. many people argue that so - called constructive ambiguity is the best way to avoid problems of moral hazard in the banking industry. i believe, however, that transparency is important in this area as well. banks that are " too big to fail " from a