This type of monetary policy is known as leaning against the wind, and in this case the wind would be growth in household debt. Household indebtedness has affected the monetary policy assessment in Sweden in earlier periods, too, but it is primarily since autumn 2012 that it has explicitly been cited as a reason for a higher repo rate than is strictly justified by the prospects for inflation and resource utilisation.1 Although other central banks have also referred to high indebtedness and mentioned financial stability risks in connection with monetary policy decisions, few central banks have faced such a clear conflict of objectives as the Riksbank. What this entails is either to keep the repo rate higher to slow down the build-up of debt, or to keep it lower to bring up an inflation that has long been below target at the same time as resource utilisation has been low. Personally, I have been sceptical of the policy conducted, which has meant that I entered reservations against the decisions over a long period of time. Now that inflation has recently moved even further away from the target, the Executive Board has been able to agree on the monetary policy decisions. The repo rate was cut most recently in December last year and the repo-rate path was lowered. Why inflation has been so low is something of an open question. I believe that the policy conducted has been an important contributory factor. At the same time, I believe that its effects on household indebtedness have been minor.
As a result, although necessary and desirable, the digital transformation of financial intermediaries carries a significant execution risk. This is the first type of risk to which we are exposed, and one that is highly idiosyncratic, but we need to recognise it. Next, digitalisation is challenging existing business models and their profitability, which can have destabilising effects in a banking industry such as Europe’s where there are overcapacity issues and where profitability is rising but remains well below US levels. The third type of risk is that digitalisation gives operational risk a more systemic footprint. In a 2/7  BIS central bankers' speeches  largely dematerialised world where financial services can be accessed via multiple channels, cyber-risk poses an increasingly significant threat. Similarly, the use by financial intermediaries and their operational reliance on a small handful of providers of “suites” of technological solutions, and not just softwares, raises the risk that a service disruption might impact the entire system and not just a single entity. b. What are the priorities for microprudential supervisors? In light of these complex and interconnected risks, and the fact that a significant portion of them are new, financial intermediaries and supervisors need to exercise vigilance in order to understand the exact nature and impacts of the threats, and take appropriate steps to contain and manage them.