Bloomberg, October 31, 2014: “Central Banker Hero Becomes Face of Failure in Swedish Tale“
Editorial in Financial Times, October 30, 2014.
Bloomberg, October 29, 2014: “How Sweden Joined Central Banking’s Hall of Shame.”
New interview in Bloomberg: “Riksbanker who left in protest says untried steps only hope,” October 27, 2014.
“Riksbanken kan inte upprätthålla finansiell stabilitet genom att debattera” (in Swedish), 2nd reply to Carl B. Hamilton on di.se, the website of Dagens Industri. Also on Ekonomistas (in Swedish, with links).
Carl B. Hamilton seems to think that the Riksbank by op-eds, analyses and discussions in the new Financial Stability Council has sufficient instruments to affect financial stability to warrant financial stability as an objective. But the Council is only a forum for discussions and cannot make decisions. Since the Riksbank has no decision power over micro- and macroprudential instruments (that power is with Finansinspektionen, the Swedish FSA), the Riksbank cannot be accountable for financial stability and not have financial stability as an objective. Continue reading
(English translation of an article of mine on the website of the Swedish business newspaper Dagens Industri, July 21, 2014.)
Should the Riksbank have financial stability as an objective besides price stability? According to an op-ed by Carl B. Hamilton in Dagens Industri on July 17, the answer is yes. According to Hamilton, this is even a practice already established by the Riksdag (the Swedish parliament). The Riksbank Act needs to be amended, but only as a formality.
But Hamilton forgets that the Riksbank has no effective policy instruments to affect financial stability, except in connection with the management of financial crises. He also forgets that the government with the support of seven parties in the Riksdag – including Folkpartiet (the Liberal Party) – has decided that the Riksbank will not receive any such instruments. Without the instruments, the Riksbank neither can nor should have financial stability as an objective. Continue reading
The Economist writes about Swedish monetary policy in its latest issue: “Subzero conditions – interest rates are back at crisis lows.”
Monetary policy in Sweden has failed. The Riksbank’s policy has led to too low inflation and too high unemployment. The reasons for the failure are that the governor has become too powerful, contrary to the original idea of an executive board with six independent members, and that the oversight and control of the Riksbank by the Riksdag has not worked. To remedy these shortcomings, the democratic control of the Riksbank needs to be enhanced and sharpened, the Riksdag’s appointment policy for the executive board needs to be improved, and the responsibilities of the Riksbank and Finansinspektionen for monetary and macroprudential policy needs to be clarified. Continue reading
Penningpolitiken har misslyckats. Riksbankens agerande har lett till för låg inflation och för hög arbetslöshet. Politiken brister på grund av att Riksbankschefen fått för stor makt och Riksdagens uppföljning och kontroll inte fungerar. För att avhjälpa bristerna bör den demokratiska kontrollen av Riksbanken skärpas, Riksbanksfullmäktiges utnämningspolitik förbättras, och ansvarfördelningen mellan penningpolitiken och makrotillsynen klargöras.
Artikel på DN Debatt, “Skärp den demokratiska kontrollen av Riksbanken,” 2014-05-28, mot bakgrund av en utförligare artikel i Ekonomisk debatt nr 4, “Riksbanken, måluppfyllelsen och den demokratiska kontrollen“. Continue reading
Interview in Svenska Dagbladet, paper edition, January 16, 2014: “It has been different in other countries” (in Swedish).
Interview by Radio Sweden (in English), January 15, 2016.
Interview in Svenska Dagbladet, January 14, 2013 (in Swedish).
Main editorial in Dagens Nyheter, December 18, 2013: “Riksbanken svävar på målet” (“The Riksbank is evasive,” in Swedish.
Mark Gertler, John Taylor, Mohamed El Erian, Michael Bordo, and me on how Ben Bernanke will be remembered, Wall Street Journal, December 17, 2013.