The G20 has agreed a wide range of regulatory standards and put in place the mechanisms for deep supervisory cooperation. These Financial Stability Board (FSB) reforms create a platform for cross border financial services between different legal systems and regulatory approaches that achieve similar outcomes for financial stability. This avoids unnecessary  25  See Carney, M (2016), ‘The Spectre of Monetarism’. Rodrik, D. (2011). The globalization paradox: Democracy and the future of the world economy. 27 See Carney, M (2017), ‘A Fine Balance’. 28 Sales are increasingly taking place on-line and over platforms, rather than on the high street. Intangible capital is now more important than physical capital. A hyper-connected, capital-light world, could offers a future that increasingly belongs to small and medium-sized firms, with platforms (such as taskrabbit, Amazon, Etsy, Shopify, and SamaHub) giving them direct stakes in local and global markets. 26  16  All speeches are available online at www.bankofengland.co.uk/speeches  16  duplication and costly fragmentation while promoting greater competition, enhanced resilience and improved efficiency to the benefit of all our citizens. Conclusion: Is this How the Expansion Ends? Although the economic and financial imbalances in the global economy do not yet appear to contain the seeds of their own demise, global momentum is softening. Monetary policymakers may need to be disciplined and macroprudential authorities, vigilant. Risks from China and from de-globalisation are significant and growing. Could they be how the expansion ends? Protectionism appears already to be having an impact.
One complication is the lack of clear signs stating the speed limit - in other words; there is always uncertainty over where the capacity ceiling lies - or how high the Swedish economy's potential growth rate is. At the Riksbank we have previously estimated this to be approximately 2-2.5 per cent. Today, when we conclude that the inflation tendencies in the Swedish economy appear to have been higher than we had previously realised, one of the possible explanations is that we may have over-estimated the Swedish economy's production capacity. The Inflation Report to be published in March, which will form the basis for our decision on the interest rate  2  BIS Review 14/2002  at our next monetary policy meeting, will provide an overall assessment of resource utilisation and inflation. Economic progress in the 1990s In the seam between the 1980s and 1990s, we had a clear overheating of the Swedish economy, despite the fact that growth had been a modest 2 per cent a year during the 1980s. Over the past five years, the economy has grown by 3 per cent a year without the corresponding worries. Something has evidently changed for the better. My opinion is that the reason is positive changes particularly in four areas important for growth: the macroeconomy, increased competition, trade and developments in technology. I shall briefly discuss these and then, in conclusion, say a few words about the challenges I see for the Swedish economy at present. Economic policy has changed in different stages during the 1990s.