It may seem as though competition and efficiency will only increase as digitalisation increases. But the payment market is distinguished by positive network effects. This means that when new users connect to a payment solution, there is increased benefit for all participants. This means that the market could ultimately be dominated by one or a couple of large companies that attain  8 It is of course also important to have a stable fiscal policy to ensure there is confidence in the currency. 5 [35]  monopoly status. It is therefore important that the state takes responsibility and regulates the market, but as new products are positive for consumers, the state also needs to implement measures to benefit competition and innovation. 9 These new types of company that have begun competing on the payment market often have as business concept to gather and analyse data, which means they can offer cheap services. This so-called FinTech sector has grown rapidly and is now challenging the banks. In general, increased competition is positive, as it leads to lower prices for companies and customers. However, it is important that the same rules apply to all players on the market, and that the legislation also stays apace of the emergence of new phenomena, which can be difficult to classify and to scrutinise. Sometimes the changes on the payment market occur very quickly. In China, it didn’t take long before companies like Alipay and WeChat Pay had taken a dominant position. This is where network effects come in.
We lent amounts to Swedish banks corresponding to just over 9 per cent of GDP, a measure that was intended to ensure that the financial system stabilised to allow us to conduct monetary policy and contribute to production and employment not falling as heavily as in the wake of the financial crisis. The new act means we would need to determine the main purpose of these measures, and the conditions and procedures differ, depending on the purpose. Was what we did mainly monetary policy or financial stability? Are the measures we implemented during the coronavirus pandemic mostly monetary policy or financial stability policy? In our world they are of course both, as our two core activities are two sides of the same coin. As I described earlier, the financial markets are developing rapidly, and needs are thus changing over time. It is difficult to predict how the next crisis will look, or what measures might then be needed. The fact that we have been able to take action during the pandemic is because the current legislation gives us opportunity to do so. Handling the global financial crisis 2008-2009 and the current pandemic, and also future events, requires the right tools and a flexible mandate. This is made more difficult by the proposal for a new Sveriges Riksbank Act. The proposal also limits the Riksbank’s possibilities to both build up and use its foreign exchange reserves. This is problematic, as the Swedish financial system is strongly dependent on short-term market financing, largely in foreign currencies.