[Ekonomistas post, in Swedish.]
In an op-ed in Dagens Nyheter (English translation here), I argued that the democratic control of the Riksbank should be improved, since the Riksbank had neglected both fulfilling the inflation target and supporting the most important goal of Swedish economic policy, full employment. Among other things, I suggested that the Fiscal Policy Council should get additional resources and an expanded mandate to evaluate monetary policy. It may also be appropriate to move the new Fiscal and Monetary Policy Council to the Riksdag, the Swedish parliament. According to Bloomberg Finance Minister Anders Borg has now commented on the issue.
According to Bloomberg, Anders Borg has said the following:
Finance Minister Anders Borg said it’s “worth having a discussion” to explore whether an independent agency should monitor the central bank to address concerns about its failure to fulfill its inflation mandate. The bank is currently overseen by the parliament’s finance committee.
Borg said Sweden’s independent body designed to monitor budget policy might be given an expanded role to also oversee the central bank.
“One way of doing so in an orderly fashion would be that the Swedish Fiscal Policy Council also examined monetary policy,” he said.
Doing so would be “conditioned on that we can reach an agreement across party bloc lines to put the Swedish Fiscal Policy Council under the control of parliament” instead of the government, he said. We must “make sure that they will have an independent position because we can’t have a government agency that’s evaluating an independent Riksbank,” he said.
An agreement across party lines should be possible, especially since the Social Democratic Research Commission chaired by professor Mårten Palme earlier suggested that the Fiscal Policy Council should get additional resources and an expanded mandate to also evaluate monetary policy.