In other words, the inflation target is the Riksbank’s and only the Riksbank’s. This interpretation is, however, both incorrect and unfortunate. So whose is the inflation target, then? The decision to introduce an inflation target of 2 per cent was taken in 1993 by the General Council of the Riksbank. At that time, the General Council had a different role to the one it has today and was the Riksbank’s decision-making body. The then Governor, Bengt Dennis, has described the prevailing regime as follows (Dennis, 2003, p. 182): “The General Council consisted of eight members. Seven members were elected by the Riksdag while the eighth, the Governor of the Riksbank, was appointed by the General Council. It was a council elected on political grounds and the majority of its members were active politicians”. At the outset, the inflation target received a fair amount of criticism, even from politicians. But quite soon, when the advantages of the target had become clearer, broad support emerged for it. For many years now, the Riksdag Committee on Finance has performed a review of monetary policy and every few years has also tasked two foreign economists to review monetary policy. These reviews largely concern the policy that the Riksbank has conducted but there is of course nothing in principle to prevent framework issues being addressed, which has also happened on occasion.
Urban Bäckström: The inflation targeting approach  Speech by Mr Urban Bäckström, Governor of the Sveriges Riksbank and Chairman of the Board of Directors and President of the Bank for International Settlements, at the 28th Economic Conference of the Oesterreichische Nationalbank, Wien, on 15 June 2000. *  *  *  First a word of thanks for the invitation to attend this conference and discuss challenges for monetary policy together with such a distinguished panel. In the last decade a growing number of countries have chosen to conduct monetary policy with an explicit target for inflation. One reason behind this choice has no doubt been these countries’ poor experience with a fixed, but adjustable, exchange rate regime. The first country to formally adopt a policy of targeting inflation was New Zealand, in 1990. Canada did the same in 1991, followed by the United Kingdom, Sweden and Australia. Since the early 1990s other countries have also introduced some variant of inflation targeting. It is interesting to note that before the 1990s the predominant view was that a floating exchange rate regime was not suitable for a small open economy. Today, I believe that experience among those countries that are targeting inflation has been exceptionally good. In fact, even some emerging market countries are now building the same kind of regime.