The crisis has reignited the debate of whether central banks should “lean against the wind” and use monetary policy also to prevent the build-up of asset price bubbles. This debate is still ongoing. And as usual, the Riksbank has been at the forefront of it, with regard to both policy invention and implementation. The Riksbank started to tighten monetary policy in 2010.
Initially, the concern was rising consumer prices. But attention soon shifted to high levels of household debt, which were perceived to present a vulnerability to the wider economy. To mitigate this weakness, monetary policy continued to tighten. This decision was not uncontroversial at the time.