Among these were exuberant real estate prices, and a flourishing  BIS Review 87/2010  1  securitisation business, which facilitated excessive credit growth. A group of countries – including China, Japan, and oil-exporting economies – were saving too much, while others – such as the US – were heavily borrowing to finance consumption and investment. These developments were unsustainable in the long-run. At the same time, in an environment characterised by low interest rates, a global search for yield may have led investors to take on too much risk. On the micro side, it became apparent that market participants’ incentives were not aligned with the risks they were taking, and that some investors were not fully aware of the extent of their exposures, which contributed to the under-pricing of risk. In the banking sector in particular, deficiencies in the design of the prudential framework for banks, in the supervisory review of banks’ risk management procedures and in the rules for compensation and pay were some of the microeconomic factors leading to important vulnerabilities. III. Regulatory and supervisory initiatives currently under discussion  After witnessing the first global banking crisis since the Great Depression, it became clear that it was absolutely crucial to get the banking sector on a sound footing again. Policy makers responded rather quickly and forcefully to the crisis, which resulted in a wideencompassing reform agenda.
Nor should the Riksbank’s proposals be regarded as set in stone; it must be possible for the retail payments council to develop to remain relevant and thus working methods and participation should be reviewed on a regular basis. The Riksbank intends to have a preliminary constituent meeting at the beginning of February. The way forward involves new and old technology To summarise: Sweden is in the forefront with regard to the development and use of cashless payment methods. This development is positive in many ways, but changes also entail challenges. The Riksbank is taking an active part in the work on managing these challenges to make things easier for the various participants in the economy. Given this, I am convinced that we have a good basis for resolving short-term and long-term problems and frictions. The way forward is to continue refining old technology in new versions and also to create entirely new solutions. There is good scope to ensure our payment services will be even safer, more efficient, easily accessible and cheaper in the future. Thank you! 6  BIS central bankers’ speeches