For example, we do not have a system where the private sector will share risks across borders, where capital and liquidity are fungible in pan-European financial institutions. A common deposit insurance would help, but it’s important to allow a European bank to be able to operate in the euro area as a single entity. Not all banks would be able to do that, but we need to have a timetable where we say, four or five years from now the banks that qualify in terms of quality and quantity of capital will get a European license. You need to put a very serious, technical, timetable for that, and announce it. That would create a new environment for banking. Is there a challenge to the ECB’s credibility because of the change of stance on the effective lower bound of rates? The story of the lower bound is a very simple one. For all non- standard measures there is not much historical experience, there was very little academic literature until recently. Many central banks thought the zero lower bound is zero, and when we initially decided to go for –0.1, we were not fully sure of the total impact on financial conditions in general and especially on banking. The negative deposit rate, like most non-standard measures – the forward guidance of July 2013, the LTROs starting in 2011, the TLTRO and the APP – delivered more than we expected in terms of their impact on financial conditions.
Irma Rosenberg: Monetary policy with our own interest rate path Speech by Ms Irma Rosenberg, First Deputy Governor of the Sveriges Riksbank, at a lunch meeting arranged by Öhmans, Stockholm, 8 June 2007. *  *  *  Introduction Let me begin by thanking you for the invitation to come here and speak about monetary policy. Today I would like to take the opportunity to talk about some issues that are important to me. I would like to explain why I considered that the repo rate should be kept unchanged at the most recent monetary policy meeting. I shall also comment on some of the views we at the Riksbank have received with regard to our forecast of the interest rate path. But I intend to begin with a few words on the changes in our monetary policy communication which were decided by the Executive Board recently. Changes in the monetary policy communication Since the inflation target was introduced, the Riksbank has tried in different ways to become more open and clear with regard to how monetary policy is conducted. We have gradually published more and more of the background information used for our decisions, in particular the forecasts for inflation and economic developments in general. The decision to publish our own forecast for the repo rate, which we took at the beginning of the year, was a natural continuation of this process. In mid-May we decided to implement some further changes to become even clearer in our monetary policy communication.