An important part of the process regarding macroprudential policy in Sweden is a close cooperation between Finansinspektionen, the Government, the Riksbank and the Swedish National Debt Office, with regard to the analysis of current issues. These four are also represented on the Financial Stability Council, which meets regularly to discuss issues of financial stability and how financial imbalances can be counteracted. I believe that it is much more important that there is actually someone who is responsible for the macroprudential policy tools and prepared to take action, than that this is perfectly coordinated with monetary policy. My hope is that the discussions in the Financial Stability Council will lead to the decision that need to be made actually being made – and being made in time. This will probably at times involve decisions that are politically uncomfortable, and have direct consequences for people’s wallets. This makes considerable demands with regard to integrity and independence – not just in the formal sense – of those who are to make the decisions. Does monetary policy need to help? There is an intensive international discussion on whether monetary policy can be separated completely from the stabilisation of the financial cycle, or whether it may in certain situations  10  See Jonsson and Moran (2013).
And if they materialised to any very significant extent, the resulting tensions could be serious, because alternative mechanisms - such as labour migration or fiscal redistribution through a central budget - which help to mitigate sectoral or regional disparities in the national context - are less developed at the Eurozone level. Some commentators point to the present inflationary pressures in Ireland as an example of the problems that could arise where the single monetary policy is easier than the national situation might require - though I am not sure how far one can sensibly generalise from the Irish experience. It is equally possible to envisage circumstances in which the single monetary policy is too restrictive for some countries. The fact that the UK did not join in the first wave of EMU was a disappointment to some people, including to some of our European partners - but it was also a considerable relief to them - we would certainly have complicated the task of the ECB in setting its single monetary policy. And from our own perspective, if we had joined EMU from the start - and had Eurozone interest rates over the past eighteen months or so, it is very difficult to envisage how we would have avoided an inflationary boom in the UK. It is true that, to the extent that the present imbalance within our economy reflects sterling’s appreciation against the euro, we would have been protected against that.