In the light of this, it is not surprising that criticism of the Riksbank’s approach was strong at times. The discussion on making the Riksbank more independent aroused strong feelings not least among many social-democrats and in parts of the trade union movement. There are obviously different views of the extent to which it is necessary with such a stringent monetary policy during the years of adaptation. We can never obtain an answer to this but we can at any rate note that we now seem to have achieved the stable prices we aimed at. To date, it is too early to say whether price stability can be combined with as high employment as previously, but what we are now seeing gives rise to optimism. Price stability requires some independence for the Riksbank The strong pessimism on the future prospects for the Swedish economy that affected the general mood after the crisis in 1992 has then in recent years been transformed into an equally strong optimism! We can now draw the conclusion that the pessimism was exaggerated but we know nothing yet about the situation with respect to today’s optimism. It would seem to be a fact that there has been over-optimism about developments in certain IT-related industries, although the question is how we should regard the more long-term growth of the Swedish economy. Many structural reforms have been carried out. The financial markets have been deregulated, competition on the goods markets has also increased and many state monopolies have been abolished.
As a creature of the G10, the Committee could originally lay claim to coverage of most of the world’s truly internationally active banks. But as banks and financial markets became increasingly integrated across national borders, this claim to be the standard setter for all internationally active banks became more and more difficult to justify. During the 1990s and 2000s, the Committee made good use of its Core Principles Liaison Group to seek advice from members outside the G10. The CPLG’s contribution was highly  2  BIS central bankers’ speeches  constructive when Basel II was developed, for example. But as the size and importance of jurisdictions “outside the tent” grew, even this arrangement became increasingly untenable. And so, in 2009, the Committee essentially stepped up from a G10 to a G20 foundation as it sought a truly coordinated response to the global financial crisis. Indeed, we now have more than 40 organisations representing 27 member jurisdictions around the table. As a result, the Committee’s coverage of global banking assets has gone from about 60% to 90%. This much greater inclusiveness lends, in turn, greater legitimacy and credibility to the Committee’s standards, as they are now set by a process that is truly reflective of international markets. The fourth key influence is a more recent one – the shift in thinking from a micro- to a macroprudential perspective. For much of its life, the Committee focused primarily on microprudential issues.