Without wishing to anticipate this inquiry, let me just note that we should, as far as possible, manage problems before they arise. Finansinspektionen’s inquiry appears to be a step in this direction. The Baltic countries – more stable but still cause for concern One risk tied to the financial markets and which is particularly important to Sweden, is economic developments in the Baltic countries. Just a few weeks ago, we met here in the Riksdag Committee of Finance to discuss the Swedish banks’ commitments in Estonia, Latvia and Lithuania – what has happened in recent years, what we are expecting to see in the future and what we can learn from recent events. I do not intend to repeat what we talked about then, but can note that developments in the Baltic countries do appear somewhat brighter now than they did a while ago, but that the future is still very uncertain. One question that could affect the region as a whole is, for example, Estonia’s application to join the EMU. Loan losses in the Baltic countries are still increasing, which in turn has a negative effect on the Swedish banks’ profitability. We are counting on loan losses there peaking during 2010, but also on the Swedish banks being able to cope with the strains this will entail. An important element here is that the banks have increased their capital and thus their resilience to increased loan losses. The road ahead of us is not without problems.
The fact that the loans are falling due is of course included in our calculations when we assess how we will formulate our future monetary policy. Phasing out the loans is fairly undramatic. The measures will disappear, as I mentioned earlier; in principle this will occur automatically as the need for the measures disappears. The fixed-rate loans that currently have the longest maturities mature in the autumn 2010. At present we do not expect there will be a need to offer new fixed-rate loans at longer maturities beyond this horizon. But of course we are closely following developments in the financial markets, and are prepared to implement new such measures if necessary. The interest rate increases entail slightly more difficult considerations. For many central banks the question of timing is a difficult one. Withdrawing support measures and beginning to raise interest rates too early or too quickly may slow down the economic recovery in a sensitive phase. If the expansionary policy instead continues too long, there is a risk that inflation will be too high or that imbalances will build up, for instance, on the housing market or between different countries. Assets such as commercial property, but also residential property, have often played an important role in economic crises. There are links between house prices and the financial markets, not least through interest rates and lending. And low interest expenditure usually stimulates both credit growth and house prices, all else being equal. Considerations regarding the housing market...