myriad of ways. one way is through incentives for homeownership. in many countries, including the united states, taxpayers can deduct interest paid on home mortgages, and various initiatives by state and local authorities support lowerincome homebuyers. france and germany created government - subsidized home - purchase savings accounts. and canada allows early withdrawal from government - provided retirement pension funds for home purchases. 5 and as we all know governments are also involved in housing finance. they guarantee credit to consumers through housing agencies such as the u. s. federal housing administration or the canada mortgage and housing corporation. 6 the canadian government also guarantees mortgages on banks ’ books. and at various points in time, jurisdictions have explicitly or implicitly backstopped various intermediaries critical to the mortgage market. government intervention in the united states has also addressed the problem of the fundamental illiquidity of mortgages. going back 100 years, before the great depression, the u. s. mortgage system relied on small institutions with local deposit bases and lending markets. in the face of 1 / 8 bis central bankers'speeches widespread runs at the start of the great depression, banks holding large portfolios of illiquid home loans had to close, exacerbating the contraction. in response, the congress established housing agencies as part of the new deal to facilitate housing market liquidity by providing a way for banks to mutually insure and sell mortgages. 7 in time, the housing agencies, augmented by post - world war ii efforts to increase homeownership, grew and became the familiar government - sponsored enterprises, or gses : fannie, freddie, and the federal home loan banks ( fhlbs ). the gses bought mortgages from both bank and nonbank mortgage originators, and in turn, the gses bundled these loans and securitized them ; these mortgage - backed securities were then sold to investors. the resulting deep securitized market supported mortgage liquidity and led to broader homeownership. 8 costs of mortgage credit while the benefits to society from homeownership could suggest a case for government involvement in securitization and other measures to expand mortgage credit availability, these benefits are not without costs. a rapid increase in mortgage credit, especially when it is accompanied by a rise in house prices, can threaten the resilience of the financial system. one particularly problematic policy is government guarantees of mortgage - related assets. precr

development of debt and housing prices. even though our forecasts still made it clear that we were striving to fulfil the inflation target and this was also emphasised in our communication, it may very well be the case that we talked a little too much about the risk of financial imbalances and a little too little about the importance of inflation being close to the target. this may have created uncertainty among economic agents regarding the actual status of the inflation target, and, in turn, may have contributed to the weaker confidence in the inflation target. the emerging suspicion was perhaps that we, so to speak, had taken our eye off the ball. 4 2 jansson ( 2017 ). 3 during the first half of 2013, for example, the average of swedish forecasters expected inflation to barely reach 1. 5 per cent in 2014. the outcome was almost one percentage point lower, that is, one and a half percentage points below the target. 4 that there may be a good deal of truth in this interpretation is supported by a number of critical newspaper articles published around that time, see, for example, “ nya direktorer men samma gamla riksbank ” [ new directors but same old riksbank ], aftonbladet ( 2013 ), 22 may and “ ta tillbaka makten over riksbanken ” [ take back control over the riksbank ], dagens nyheter ( 2014 ), 15 june. 2 the important lesson to learn here is, as i see it, that it is absolutely key to show that you always do have your eye on the ball and do not let other factors come into the picture in a way that risks economic actors starting to doubt that this is the case. i have been reminded of this lesson on a number of occasions lately, most recently at the monetary policy meeting in october. the picture we painted at that time of monetary policy going forward, in which we predicted that the repo rate will be raised very slowly to take it back into positive territory in the longer term, was one that i largely considered to be well - balanced. however, i expressed considerable doubt over the next increase in the repo rate happening as early as around the turn of the year, most probably at our next meeting in december, as implied by our forecast for the repo rate. there were several reasons why i did not think it was a good idea. first, our forecast was that inflation