This is mainly because it is sometimes claimed in the general debate that the Riksbank and other inflationtargeting countries have bound themselves too tightly to a particular model and that a more “pragmatic” policy system would give better results. My conclusion is that our method of working is  BIS Review 11/2005  7  sufficiently flexible to manage the necessary balance. As I see it, there are major advantages to a system like ours, with a clear target, publication of the background data, a policy rule, etc. It provides our activities with stability, both at the staff level and in the Executive Board’s discussions and communications. We are also forced to systematically examine all new ideas and issues that arise against the framework we apply, which has proved an intellectually fruitful exercise. However, what I have tried to show here is that the methods we now use can sometimes enable us to produce more interesting data for monetary policy and to describe our considerations in a more pedagogical manner. They can make it easier to demonstrate the flexibility of the inflation-targeting regime we work with. Whether this will then have an impact on the monetary policy debate in Sweden, and ultimately on the policy conducted, is a very difficult question that only the future can answer.
During property market and economic downturns, the chance of default for this group of borrowers can be significantly higher than those with only one property under mortgage. In view of this, the HKMA considers it necessary to require banks to further tighten the underwriting criteria for mortgage loans to borrowers with multiple property mortgages to reduce the risk of banks. BIS central bankers’ speeches  1  6. Besides, the HKMA notices a recent trend of lengthening average tenor of new mortgage loans. The average tenor for new mortgage loans now is 25 years, which is three years longer than that of 22 years in 2009. Some banks have extended the maximum tenor to even 40 years. Prolonged loan tenors will not only increase credit risk of banks, but may also weaken the ability of borrowers to withstand interest rate risk. In particular, when mortgage rates return to more normal levels, borrowers with a loan that already stretches to 30 or even 40 years simply cannot seek to reduce their monthly instalment payment burden by extending the tenor, and may therefore face financial difficulty. Therefore the HKMA has now required banks to set the ceiling for the maximum loan tenor for all new mortgage loans to not more than 30 years. 7. The above measures take effect immediately. However, loan applications in respect of property transactions with provisional sale and purchase agreements signed today or earlier will not be affected. 8. Mr Arthur Yuen, our Deputy Chief Executive, will explain the details of these measures later.