Sweden
Riksbank minutes highlight effort to protect rising inflation
Executive board members saw potential for krona appreciation as a risk to inflation outlook; broad support for additional asset purchases, but some questions over size
Riksbank urges FMIs to work against cyber threats on strategic level
Survey reveals not all FMIs have strategy to counteract cyber threats; Riksbank suggests work needs to be done at a “strategic level”
Riksbank extends QE as inflation remains ‘fitful’
Central bank not yet comfortable inflation will return reliably to target, though it is forecasting CPI to be close to target in two years’ time
Swedish regulator takes second stab at amortisation rule
Macro-prudential regulator unveils plans for mandatory amortisation similar to those struck down by the Swedish judiciary in 2015
Riksbank lays out ideas for macro-prudential overhaul
Executive board accepts many – but not all – recommendations of King and Goodfriend review, and offers some radical ideas of its own
Skingsley sees turning point for Riksbank policy
Immediate threat is fading, enabling the central bank to focus more on longer-term risks, deputy governor says
Ingves raises fundamental questions about central banking
Riksbank governor sets out questions around monetary policy and macro-prudential framework in Sweden, raising the prospect of a merger with the FSA and joining the SSM
Riksbank paper finds BVAR models can outperform DSGE
Bayesian vector autoregressions often produce better forecasts than judgement-based or DSGE-based options, authors find – but DSGE is still more popular for policy-making
Nakaso considers how policy-makers could respond to low bank profitability
Bank of Japan deputy notes financial stability risks from monetary easing are low at present; considers how to respond to overheating or low profitability if necessary
Sweden’s Riksbank has mixed forecasting performance, report finds
Riksbank “relatively good” at projecting growth and unemployment, but less so when it comes to the policy rate; this is “notable” and not “particularly satisfactory”, report notes
Deputy governor warns of perils in changing Sweden’s inflation target
Sweden would only be able to raise its inflation rate successfully if other major economies around the world did also, deputy governor Ohlsson says – competiveness would disappear
Riksbank flags concerns over pace of development in payments
Tech development proceeding ‘too rapidly’, says central bank; evolution of payments could jeopardise access
Securitisation can dampen business cycles, paper finds
When securities are bought by ‘non-financial agents’ instead of financial intermediaries, they can help dampen rather than amplify cycles, research says
Riksbank minutes reveal knife-edge decision to cut
Cecilia Skingsley says decision was hardest since her appointment to the board; strong economy, weak inflation and unconventional policy make for tricky task
Riksbank cuts to new low, despite signs of overheating
Central bank pushes policy rate 15bp deeper into negative territory even as economy moves close to full capacity; board responding partly to policy easing abroad
Riksbank pushes for FSA to gain stronger tools amid delays
Amortisation requirement looks set to enter force in June, but more powerful tools for Swedish FSA may be delayed; government says negotiations take time, and it fears triggering crisis
Independent review calls for major changes at Riksbank
Riksbank criticised for reliance on models, board members’ quarrels and ‘surreal’ monetary guidance, though King and Goodfriend say it is ‘clearly a success’ compared with past regimes
Riksbank minutes reveal debate over monetary framework
Board members welcome debate over target variable and possible reinstatement of tolerance band, but af Jochnick warns changes should not be made simply because of recent failures to hit target
Riksbank prepared to ‘instantly intervene’ in krona
Executive board hands governor and first deputy the power to determine interventions to hold down the value of the krona, at unscheduled monetary policy meeting
Rising Swedish bank wages do not reflect rising talent, Riksbank paper finds
Researchers exploit large database of worker skills to assess why Swedish bank wages have risen so sharply in recent years, finding it is not because bankers have become relatively more talented
Modern central banks need big data strategy, Riksbank economists say
Central banks need to adapt to growing data volumes, but the organisational changes required could help departments work together more closely, economists say
Riksbank deputy open to scrapping CPI as target variable
Quirks of Swedish CPI make it awkward for use as the monetary policy target variable, Per Jansson says; bringing back tolerance band also a possibility
Riksbank steps up debt warnings in stability report
An absence of measures to address high asset prices and rising debt could result in a ‘serious’ shock with ‘great’ consequences for the economy, Swedish central bank warns
Sweden faces ‘economic crisis’ unless government calms housing market, governor warns
Sweden’s government needs to take urgent action to calm rapidly rising house prices or face a possible economic crisis, Stefan Ingves warns; attacks lack of clarity over macro-prudential policy