A necessary condition for this is openness and clarity! But there are also other important reasons why most central banks, and not least the Riksbank, have moved towards greater transparency. One reason is that the effectiveness of monetary policy depends on how well we succeed in communicating our intentions to the financial markets and the general public. By being open and clear, the possibility to influence interest rate-setting in the way we desire increases, both in the short term and the slightly longer term. This gives better conditions for achieving the price stability objective which the Swedish people, via the Riksdag, have allocated to us. The Riksbank’s ambition is of course to live up to, in the best manner possible, the requirements of openness and clarity made of us, both in our role as public authority and in our dealings with the financial markets and the general public. But the fact that the world around us is constantly changing leads to new demands. In practice, it means that we must be constantly developing and improving our ways of working. One expression of this is, for example, that we have begun to publish our own forecasts for the development of the policy rate. And it is probably difficult for a central bank to be clearer than this with regard to its monetary policy intentions – we actually say what we consider to be a well-balanced monetary policy in the coming period.
A further example connected with the same argument concerns the delegation of the management of the state finances to the Swedish National Debt Office – the state’s own internal bank. That "allocation of responsibility” is also important for monetary policy. I spoke earlier about occasions long ago when the central bank was forced to use its banknote printing presses to finance government deficits that for various reasons had got out of hand. This type of behaviour is of course incompatible with price stability. It is therefore important for the credibility of monetary policy that there are rules for how state borrowing should be handled and that monetary financing is forbidden. According to the law, the Riksbank shall not "…extend credit to or purchase debt instruments directly from the state, another public body or an institution of the European Union.” 1 In Sweden it is another authority, the Swedish National Debt Office, that finances the national debt and grants state guarantees and loans. Another reason why the political system has delegated monetary policy to an organisation with expertise in this field, is that it in many ways concerns technically complicated operations. This has also been done in the case of many other authorities, which are responsible for technical issues that are important to society. And this is in itself natural.