I do not believe that it would have been possible to build up confidence in the price stability target as quickly as we did if we had not been as open as we were regarding our work and our decisions. •  Secondly, openness and clarity are currently an important part of monetary policy in itself. You could say they are one of the tools in our toolbox. So what do I mean by this? There is a relationship between interest rates with different durations. And expectations of short-term interest rates, which the central bank governs, are important to the long-term interest rates. A central bank can therefore ”indirectly” influence interest rates with longer durations by influencing expectations of shortterm interest rates. Greater influence over interest-setting throughout the economy – the yield curve – makes the impact of monetary policy more effective. This is often called conducting monetary policy with the aid of “management of expectations”. And the best way to do this is to provide good information. •  The third and final aspect is that increased openness and clarity “outwards” can contribute to our working more efficiently within the Riksbank. This is a quite important argument. The more open we are, the easier it is for others to evaluate how well our monetary policy functions. This gives us an extra incentive to do a good job. What has the process towards openness and clarity resulted in?
To improve the exchange of information and the cooperation between the authorities in different countries, special agreements have been signed between the EU member states. In addition, various work is being done to ensure that the member states implement and apply relevant EC regulations in a uniform manner. All of this is good, of course, and is aimed at managing the problems and challenges I have taken up here today. But it is far from sufficient. I do not intend to go into any detailed suggestions of how the various problems should be resolved. Instead, I would just like to convey – as a contribution to continued discussions on this subject – some general thoughts on how we can proceed. BIS Review 38/2007  3  In the short term, we should make improvements primarily in three areas: Firstly, we in the EU should develop joint regulations for crisis management, which link together the responsibility for supervision and crisis management in a good way. The ultimate driving force to achieving efficient and appropriate supervision is, after all, the knowledge that one has to bear the consequences of deficiencies in supervision. Secondly, we should improve and deepen the exchange of information, cooperation and coordination between the authorities in the different countries. At present there is, for instance, no common model as to how supervisory authorities can work together. Such a model is necessary to maintain high quality and efficiency in the supervision of complex banks with operations in several countries.