That said, the studies that do exist tentatively support the conclusion that macro-prudential policy can be effective in the euro area. Assetside measures like LTV, LTI and DTI in particular have been found to be effective in dampening real estate booms. 10 As this was the sector at the heart of the crisis in several euro area countries, this is encouraging. Further research in this area is essential to help us better understand the impact and transmission channels of macro-prudential policies. Questions of effectiveness aside, where the SSM represents a major step forward in macroprudential policy, is in creating some centralisation of macro-prudential decision-making. The SSM Regulation gives the ECB the power to apply stricter macro-prudential measures than national authorities if it deems necessary. This allows us to take an integrated view of macroprudential policy – spillovers, arbitrage effects – and provides a safeguard against inaction bias at the national level. Moreover, the important role of the ECB Governing Council in macro-prudential decisionmaking allows for interactions between monetary policy and macro-prudential policy to be internalised and synergies to be exploited. To give just one example, several of the nonstandard measures we have adopted during the crisis, such as changes in collateral haircuts or reserve requirements, might in certain cases overlap with macro-prudential measures like liquidity ratios and margin requirements. This suggests that macro-prudential policies can support us in fulfilling our mandate. Conclusion Let me conclude. Since the launch of the euro, we have become more interconnected.
Naturally, we wish to avoid this. But at the same time, I think it is important to begin to take action. In the long run, it is no sustainable for debts to continue increasing at the same pace as today. So why does the Riksbank care about household indebtedness? The Riksbank is concerned about household indebtedness partly because international confidence in the Swedish housing and mortgage markets are necessary conditions for our financial system to function smoothly. Financial developments in turn are linked to developments in the real economy. The indebtedness of Swedish households can thus affect the Riksbank’s conditions to carry out its statutory tasks, price stability and financial stability. It is therefore important that the Riksbank continues to follow developments, analyses and highlights risks linked to household indebtedness. 8  See Barclays 2012. (Over-promising? Encumbrance at European Banks, Barclays Capital Equity Research. 9  See Financial Stability Report 2013:2, Sveriges Riksbank. 8  BIS central bankers’ speeches