Suffice it to mention large-scale investment in power-intensive industries and other sectors during the first half of the period in question, a major increase in real disposable income in the past few years and credit expansion which has been funded by foreign borrowing. The Central Bank's monetary policy has therefore played a minor role in this development and its impact has primarily been of a short-term nature and will eventually be levelled out. Of course, the Central Bank is also aware that open access to foreign capital softens the impact of its monetary policy. However, it should be borne in mind that access to foreign capital is not unlimited in the final analysis, and is neither risk-free nor available to all Icelandic companies. Household and corporate sensitivity to interest rate changes may be low at present, but in the long term the impact of higher interest rates cannot be avoided. The Central Bank is convinced of the impact that its interest rate instruments have, and recent discussions about high interest rates can be cited as precisely such evidence that their impact is being felt in full. Furthermore, the Central Bank has been accused of basing its assessments of economic developments on somewhat outdated data. Undoubtedly there is always scope for improvement, but the Central Bank does compile extensive data about financial market developments on a monthly basis, and various other data even more frequently. Its data on the exchange rate of the króna, for example, cannot be more up-to-date.
The International Monetary Fund has adapted to these changes, seeking to respond in its capacity as the guardian of international monetary stability to the new problems that have arisen. It has evolved from focusing essentially on monetary stability and on countries’ external transactions and the management of their exchange rates, to areas more related to the overall quality of macroeconomic policies and to the design of structural policies and sound institutions. More recently, the Fund has devoted particular attention to financial stability. To a certain extent, central banks have also undergone changes similar to those at the Fund. Developments in macroeconomic theory and the experience built up over the years have forged an increasingly broad consensus on the need to apply stability-oriented macroeconomic policies and, in particular, to conduct an independent monetary policy with the primary objective of achieving and maintaining price stability, which is vital for sustained economic growth. Central banks have also focused increasingly on financial stability issues, both in countries where the central bank is the supervisor of the banking system and in those where such functions are entrusted to a different supervisory agency. In the case of the Banco de España, these transformations have also been induced by far-reaching changes in our environment and in the role of the central bank, including most notably the adoption of the euro as the single currency for an ample group of European Union countries.