For example, it is not possible to argue at a given monetary policy meeting that “of the 25 basis points I feel the repo rate should be raised, 5 points are aimed at dampening risks linked to household debt and housing prices. The remaining 20 basis points are aimed at stabilising inflation and economic activity in the short run”. Monetary policy decision-making just does not work like this. Moreover, the Executive Board consists of six individuals. Each of them has very likely had his or her own view of what role the risks linked to debt and housing prices have played in their decisions. It is therefore not possible to respond to the question of how much the Riksbank has leaned against the wind with a quantified measure. But what I am quite convinced of is that none of those deciding on the repo rate has had as their main reason, much less their only reason, that monetary policy must lean against the wind. The second question is whether the policy of leaning against the wind has had any tangible effect, given that consideration to risks linked to the development of household debt and housing prices, as I said, has played a fairly subordinate role in policy-making. I am convinced that the policy has played an important role, despite the element of leaning against the wind being much more modest than the critics claim.
At the presentation of the last report on financial stability, we expressed our conviction that the financial system needs to be made more resilient to possible shocks. This is all the more valid if we consider the hundreds of billions of taxpayers’ money that had to be spent worldwide on stabilising the financial system over the past few months. The focus is on the need for improvement in the “shock absorbers”: capital and liquidity. The crisis has shown that the current regulation in these areas is no longer sufficient in the case of the big banks. Their level of capital is inadequate when set in relation to their risks. In the area of liquidity, events have occurred that were not taken into account in any of the big banks’ scenarios. The reform of the capital adequacy regulation for big banks, drawn up by the SFBC with the support of the SNB, represents an important step in the right direction – for the area of capital. It specifies an increase in risk-weighted capital together with the introduction of a leverage ratio. The leverage ratio is a supplementary instrument and does not call into question the principle of risk-sensitivity with regard to the capital regulation. An essential constituent of the reform are countercyclical mechanisms whereby, in good times, banks are required to considerably exceed the minimum requirements for capital and the leverage ratio. This ensures that a buffer is created to absorb losses during crises.