urban backstrom : the current situation for swedish monetary policy speech by mr urban backstrom, governor of the sveriges riksbank and chairman of the board of directors and president of the bank for international settlements, before the swedish parliamentary standing committee on finance, stockholm, 27 march 2001. * * * first a word of thanks to the committee for the invitation to have a stimulating discussion about the current situation for monetary policy. an open discussion of these matters is important for people ’ s perception of the riksbank ’ s legitimacy. i cannot think of a more suitable forum than you as representatives of our principal, the riksdag. risk of a slowdown after a series of years with strong economic growth we can look back on a series of years with strong economic growth in sweden, accompanied by low inflation. as far as can be judged at present, one explanation for this combination is that the swedish economy is functioning more efficiently. to some extent, however, it has also been a cyclical phenomenon. after the economic crisis that ravaged sweden in the early 1990s, there were plenty of unutilised resources to draw on and therefore less risk of rising production hitting the ceiling at an early stage. sooner or later, however, demand growth that is excessively rapid and persistent will generate imbalances in the economy and that normally pushes the rate of price and wage increases up. such a course of events is liable to result in a recession, with falling output and rising unemployment. a monetary policy that is guided by an inflation target is basically concerned with adapting the development of demand to the economy ’ s long - term growth. that is not easy, i can assure you, and our chances should not be exaggerated. towards the end of last year, however, activity in the swedish economy did begin to slow to a growth rate that can result in a stable long term development. the last time we met, early in october, we discussed the situation in these terms and i concluded that if the strong economic upswing were to continue, it would be necessary to raise the repo rate. other central banks around the world had been facing a similar situation for some time. the u. s. federal reserve, for example, had raised its instrumental rate successively during 1999 and 2000 to 6. 5 per cent. last year the european central bank raised its rate to 4. 75 per cent and the bank of england ’ s rate was increased to 6. 0 per cent. i recall that last year

lars nyberg : economic activity and housing finance in sweden speech by mr lars nyberg, deputy governor of sveriges riksbank, at a conference, in frankfurt am main, 4 june 2004. * * * i would like to begin by thanking you for the invitation to come here to frankfurt and introduce “ eurocatalyst investment focus : nordic covered bonds ”. i shall start with a few words about the riksbank ’ s activities. with the objective of maintaining price stability, the riksbank conducts a clear monetary policy with an inflation target of 2 per cent one to two years ahead, with a tolerance for deviations of plus / minus 1 percentage point. in addition, the riksbank has the task of promoting a safe and efficient payment system. as part of its work on carrying out these two tasks, the riksbank publishes an inflation report four times a year and a financial stability report twice a year. the most recent inflation report was published last week, while the latest financial stability report was published the day before yesterday. for those of you that are interested in economic and financial developments in sweden, i would recommend that you read both reports. economic activity everything i mention now about economic activity and the assessment of inflation is taken directly from the riksbank ’ s latest inflation report ( 2004 : 02 ), which was presented on friday, 28 may. in the report we forecast gdp growth in the oecd area to average around 3 per cent over the coming three years. with regard to the outlook for sweden, the riksbank foresees an average annual growth rate of almost 3 per cent in the coming years. looking at inflation prospects, the rate of price increases is expected to rise in the period ahead as resource utilisation increases in sweden and abroad. however, a continuation of relatively weak labour market conditions and a favourable cost situation mean that the rise in inflation is expected to be relatively moderate in sweden. our forecast in the report is for a risk - adjusted inflation rate of 1. 1 per cent one year ahead and 1. 8 per cent two years ahead, measured as und1x inflation. swedish housing finance on 1 july this year the act on issuing secured bonds ( 2003 : 1223 ) will come into force. one of the main incentives behind the new act is to offer swedish mortgage institutions the same favourable financing opportunities that these institutions face in european countries that have already introduced similar legislation. so will this new legislation result in a new financing structure