Since the monetary policy meeting of 18 April, some new statistics have become available for Sweden, including figures for unemployment, the retail trade and foreign trade in March and the tendency survey of the National Institute of Economic Research for April. By and large, these statistics do not indicate any significant changes in the course of development than that we saw ahead of us in the Monetary Policy Update in April. However, I think we should be cautious about reading too much into figures for individual months. I will therefore wait to make an overall assessment of the new statistics until our next monetary policy meeting in July. A factor that I think should be highlighted – although it did not directly determine my stance at the latest monetary policy meetings – is the link between monetary policy and financial stability. Let me explain this in more detail. The link between monetary policy and financial stability In my opinion there are links between monetary policy and financial stability. We should be careful to monitor the incentives that low policy rates can create over time (see slide 5). Both housing prices and household debts have increased dramatically in Sweden for some time  BIS central bankers’ speeches  3  now. This has been noted, for example, by the European Commission in an Alert Mechanism Report.4 These tendencies have slowed down over the last 12 months.
Evidently, the attractiveness for investors of issues of green bonds is a sign of the growing concern over the effects of climate change. Yet for the aforementioned transmission mechanisms to work properly, the volume of securities traded on these markets must reach a critical mass and be consistently catalogued. To achieve this, the initiatives developed within the European Commission are essential: these include most notably the taxonomy for determining the activities that contribute to sustainability in environmental terms, and the “ecological” labelling of financial products. We need a common language that can be used both by debt issuers and potential investors, so that these markets may be developed. On this point of financial investments categorised as “green”, it is worth recalling that we as central banks are also active investors in financial markets, both in monetary policy operations and in portfolio management relating to reserves. In this connection, as acknowledged in the report by the network of central banks and supervisors, and as recently indicated by Mario Draghi, we are aware that environmental risks are not yet being built into most of this portfolio’s ratings, whether internal or devised by rating agencies. Accordingly, in the Eurosystem, a thorough review of these risk valuation processes is under way. The aim is to ensure us that all the relevant factors, including environmental ones, for the prudent management of the portfolio held by the central banks are being taken into account.