I will explain why. But first I would like to describe very briefly what characterised the crisis. The characteristics of the financial crisis I have experienced two crises in the past, one in the late 1970s and early 1980s and one at the beginning of the 1990s, and have seen them both mainly from the perspective of the Ministry of Finance. When I came to the Riksbank I believed that the worst crises were behind us. However, this was not the case. Instead we experienced a third crisis, which in international terms was the most severe crisis since World War II. The financial crisis hit Sweden and the rest of Europe with full force in September 2008, when the major US investment bank Lehman Brothers filed for bankruptcy. It became much more difficult for the banks to fund their operations as the financial markets were not functioning normally. Some markets were not functioning at all. The central banks took on the role of lenders of last resort and several governments provided guarantees and support programmes for the banking sector. Monetary policy also quickly became more expansionary in the United States, the euro area and other countries. In addition, a number of central banks adopted measures to also push down the longer-term interest rates. There was also a shift towards a more expansionary fiscal policy. Despite extensive policy stimulus, the financial crisis led to a severe downturn in the United States and Europe and in developed countries in other parts of the world.
Svante Öberg: My view of monetary policy 2006–2011 Speech by Mr Svante Öberg, First Deputy Governor of the Sveriges Riksbank, at Handelsbanken, Stockholm, 18 March 2011. *  *  *  I have now been at the Riksbank for over five years and my appointment as Deputy Governor of the Riksbank expires at the turn of the year. I will have celebrated my 65th birthday by then and I have informed the General Council of the Riksbank that I will not be seeking reappointment. This makes it natural for me to look back at the conduct of monetary policy over the last five years and, in the light of this experience, discuss the direction of monetary policy in the years ahead. The three theses that I will argue for in this speech are:   Monetary policy was too expansionary before the financial crisis    Monetary policy worked well during the crisis    The repo rate needs to be raised at every meeting this year (and perhaps next year too)  Monetary policy was too expansionary in the years before the financial crisis My first thesis is thus that monetary policy was too expansionary in the years before the full force of the financial crisis hit the world in September 2008. This applies both in Sweden and abroad. I will present arguments to support this thesis in this section. Abroad Monetary policy was expansionary in the years before the financial crisis in both the United States and the euro area.