Even if some progress has been made, it is likely that no comprehensive measures will be implemented until we have in principle left the crisis entirely behind us. We should not wait for this work to be completed in all areas. In several cases we should instead remedy deficiencies as quickly as possible and improve our own financial regulatory framework. More tangibly, we propose, for instance that the Sveriges Riksbank Act should be reviewed. This is with the aim of clarifying the Riksbank’s responsibility for financial stability and what tools the Riksbank needs to manage this task. There are several important issues in this field. For example, should it be explicitly stated in the Instrument of Government or the Sveriges Riksbank Act that the Riksbank has a responsibility for financial stability? I hope that we will fairly soon have the answer to this and other related questions. Another area concerns investigating how the allocation of responsibility and coordination between the Riksbank and Finansinspektionen can be improved. Moreover, the distribution of responsibility between the Riksbank and the Swedish National Debt Office with regard to loans to the foreign currency reserve should also be made clearer. A further question is the one I raised just now, namely that an efficient regulatory framework is needed for managing banks in distress. Concluding remarks Let me finish where I began. We are on safer and firmer ground now than we were a few months ago. The acute crisis is behind us.
The TED spreads have gradually fallen and for some time have been at around the same levels as in summer 2007, before the financial crisis became acute. Although measures such as the central banks’ loans to the banks have probably played a role here, the low TED spreads indicate increased confidence and a more stable situation in the interbank market. 2  BIS Review 25/2010  Figure 2 More stable situation in the financial markets The difference between interbank rates and government bond rates (TED spread), basis points  Sources: Reuters EcoWin and the Riksbank  Another healthy sign is that individual problems have not spread exaggerated unease in the financial markets around the world. I refer here to Dubai World, for instance, which defaulted on its payments earlier in the winter and has since suffered new problems, and to Greece, which is struggling with very poor public finances. A further example is the economic problems in the Baltic countries. While these events are reminders in themselves that we still have some way to go before we can declare this crisis completely over, if the same things had happened in autumn 2008 the waves of turbulence would probably have been much higher and affected markets far from the eye of the storm. We are now on firmer ground – or on safer ice, if you prefer. A further positive sign is that activity in the financial markets has increased after being very low in some cases, particularly during the most intensive phase of the crisis.