Sweden – a small, open economy The situation in Sweden in recent years reflects our great dependence on the outside world; exports make up approximately 50 per cent of our GDP.2 The global financial crisis of 2008–2009 thus had a dramatic impact on us and contributed to the largest fall in GDP in Sweden since World War II. When global economic activity recovered in 2010, growth was instead the highest for 40 years (see slide 2). But this is history now. Over the last 12 months in particular, the European debt crisis has had a considerable impact on economic development. And Sweden is a part of Europe – not just geographically but economically too. A majority of our goods exports go to Europe and over 35 per cent to the euro area (see slide 3). The weak development of the Swedish economy during the fourth quarter of last year also reflects a dramatic fall in exports. Let me therefore comment on the situation in Europe, as it has such a significant impact on the Swedish economy and, by extension, monetary policy. The debt crisis in Europe – a lot of work remains to be done but things are moving in the right direction One of the most important pieces of the puzzle with regard to economic development in the period ahead is how the debt problems in Europe are managed (see slide 4).
One of the issues that I pursued in my role as Managing Director of the Swedish Bankers’ Association was that Swedish banks should be competitive in a European context. So, how has my background shaped my view of my new job as a member of the Executive Board of the Riksbank? A marked change since I last worked at the Riksbank is Sweden’s increased dependence on developments abroad. One could also say that what I primarily “bring with me” from the different perspectives of my earlier working life – the supervisory  1  I was, for example, a member of the Basel Committee from 2003 to 2009 and chaired the Committee of European Banking Supervisors (CEBS) – which was the forerunner of the European Banking Authority (EBA) – in 2008–2009. BIS central bankers’ speeches  1  perspective, the international perspective and the banking-sector perspective – is this realisation of the increase in Sweden’s international dependence. Monetary policy – my view Sweden is what we usually call a small, open economy. This means that our economy cannot be seen in isolation as we are highly dependent on the world around us – a factor that it is important to take into account, not least in monetary policy.