Per Jansson: Time to improve the inflation target? Speech by Mr Per Jansson, Deputy Governor of the Sveriges Riksbank, at Handelsbanken, Stockholm, 3 December 2015. *  *  *  I would like to thank Mikael Apel for helping me with this speech. Since the global financial crisis, the world economy has entered an unusually uncertain and turbulent period. The recovery following the crisis has progressed surprisingly slowly in many countries, the European monetary union has been periodically exposed to major strains and there are currently a great number of questions surrounding the developments in China and several other emerging market economies, to name just a few examples. When a storm is raging around you, it is a major advantage to be travelling in a reliable and robust vessel. In terms of an economy, this often means having well-designed economic policy frameworks and clear and credible ground rules which provide robustness and stability. I would argue that the Swedish economy has been such a vessel for a long time now, and that this has been highly beneficial to us, both from a longer-term perspective as well as during and after the financial crisis. It is evident that the Swedish economy is currently regarded as fairly stable when studying the difference in long-term yields in relation to Germany. This difference has been small for almost twenty years, and has occasionally even been negative (see Figure 1). When compared to how the situation was previously, the difference is quite striking.
Among the buffers Hong Kong banks have built up are a capital adequacy ratio of above 20%, and a liquidity coverage ratio of above 150% – well above international standards. The classified loan ratio is just 0.56%. 2/5  BIS central bankers' speeches  22. At the same time, with a return on equity of 13% last year, the Hong Kong banking industry is also among the most profitable in Asia. Capacity 23. Next, I would like to look at the capacity of the industry – skills and training. 24. It is not a coincidence that one of the financial industry’s main professional bodies – the cohost of today’s gathering – is the Hong Kong Institute of Bankers, which was founded back in 1963 to enhance the profession. 25. Everything in the financial services industry goes back to people. Since the financial crisis 10 years ago, we have seen a significant increase in the complexity in capital, liquidity, risk management and other requirements. On top of that, we have rapid developments in technology and related areas like cybersecurity. The industry has to constantly upgrade its professional expertise and standards just to keep pace. 26. But unlike some other financial sectors, our regulatory framework for banks focuses on authorizing corporate entities. There is no formal licensing regime that applies to individual banking practitioners. Our approach has therefore focused on encouragement and guidance – and to benchmarking.