This slowdown is partly counteracted by a continued weak krona and by the Swedish repo rate being low in relation to the corresponding interest rates in most other industrial nations. At the same time, we can see signs of a high level of resource utilisation and price rises in certain industries. The collective wage negotiations are not yet complete, either. The question of how the threatening international slowdown will affect the Swedish economy in greater detail is still open. It is in this light that one should regard the Riksbank's decision last Thursday, 26 April, to hold the repo rate unchanged. On 15 May the minutes of the monetary policy meeting will be published, enabling a view of the detailed reasoning behind the decision. It will be time for the next monetary policy meeting  4  BIS Review 34/2001  on 30 May. A lot can happen before then and perhaps the economic picture will have become a little clearer by then. BIS Review 34/2001  5
15 The debate about the plans to split up some very large European banks demonstrates the difficulty of measures aimed at size. At the same time, the debate illustrates that such measures are not impossible. The extent to which we are required to travel down this difficult path will depend a great deal on how much genuine progress we are able to make on the reforms I have tried to outline this evening. Competitiveness All the measures to improve financial regulation which I have discussed tonight raise the delicate issue of banks’ competitiveness. Of course, it is not the intention of any regulator to hurt banks. However, somebody has to bear the costs of preserving financial stability. Up to now, through the implicit and now explicit government guarantees, taxpayers were bearing a considerable part of these costs. By strengthening regulation, these costs are to be shifted to the banks. In economic terms, the new regulatory framework endeavours to internalise the externalities caused by banks. 13  See, for instance, Group of Thirty, Financial Reform: A Framework for Financial Stability, p. 59: “To guard against excessive concentration in national banking systems, with implications for effective official oversight, management control, and effective competition, nationwide limits on deposit concentration should be considered at a level appropriate to individual countries”. 14  Cf. for example, Y. Altunbas et al., “Efficiency in European banking”, European Economic Review 45, 2001, pp. 1931-1955. 15  Cf.