The financial stability analyses focus on macroeconomic stability factors and on the strength and soundness of the financial system as a whole. The Bank addresses both these principal areas with a strong professional ambition. Its two main fields of analysis reinforce each other and benefit from close cooperation among the staff. Both areas have forced us to put our analyses, projections and policies on a longer-term perspective which provides an opportunity for better overall economic and monetary policy management. Although much remains to be explained about the nature of the interaction of monetary and financial stability, I mentioned earlier that a sound financial system is a precondition for economic and monetary stability and the implementation of an effective monetary policy. In this respect, these areas support each other. Since financial liberalisation was introduced, we have not faced circumstances where financial stability concerns have directly affected or conflicted with monetary policy decisions. Our aim is to prevent such a situation from arising. The potential risks to financial stability at the end of the last upswing were defused by the swift achievement of monetary stability and the restoration of internal and external balance. In conclusion, I would like to repeat my warm welcome to all the participants in the seminar. I trust that both the seminar and your stay in Iceland will be interesting and rewarding, professionally and socially. BIS Review 34/2004  3
Eva Srejber: Are we ready to deal with a cross-border banking crisis in Europe? Speech by Ms Eva Srejber, First Deputy Governor of the Sveriges Riksbank, at the seminar on Financial Institutions’ Value Management in the Integrated Market in Light of the Lisbon Strategy, Gdansk, 12 May 2006. *  *  *  Introduction Thank you very much for inviting me to Gdansk and this seminar on Financial Institutions’ Value Management in the Integrated Market in Light of the Lisbon Strategy. The financial system plays a crucial role in the economy. It provides households and companies with a number of important tools as well as the infrastructure for channelling savings into funding of productive projects, managing and allocating various kinds of risk, and facilitating efficient transfer of payments. The more efficiently the financial system works, the better the rest of the economy will work. One could say that the financial system is the oil that makes the machinery run more smoothly. The European financial markets have long been very fragmented. As Europe’s economies have become more integrated, however, the drawbacks of this financial market fragmentation have become increasingly evident. A more integrated market for financial services could, for instance, lead to enhanced cross-border competition and better opportunities to make use of economies of scale and synergies. Greater competition in turn should result in a wider range of investment and financing services and more efficient pricing of these services.