Mr Heikensten discusses whether Sweden should join the euro area  Speech given by Mr Lars Heikensten, Deputy Governor of the Sveriges Riksbank to Stockholm City’s financial staff on 3 September 1999. *  *  *  Besides being one of the most momentous changes in the continent’s economic policy for many decades, the introduction of the single European currency at the beginning of this year was a major step in the political process that has been bringing the countries of Europe closer together since the 1950s. When EMU is debated in Sweden, the latter aspect tends to be neglected in favour of more or less short-run economic advantages and drawbacks. In 1997 the Government and the Riksdag (Sweden’s parliament) decided that Sweden would not be adopting the single currency from January 1999. A lack of popular support was given as the reason. Euro area participation at a later date was not ruled out, however, and it was underscored that Sweden must therefore have its options as open as possible. For true freedom of action there are certain definite requirements. Policy must remain focused on stability so that we can fulfil the jointly agreed criteria for entry. Sweden must follow developments in Europe and make practical preparations so that participation is feasible when we want to join. Freedom of action also requires that we are knowledgeable about the monetary union and actively debate its issues. Today I intend to make a contribution to that discussion.
Már Guðmundsson: Capital flows and fragmentation of the international financial system Speech by Mr Már Guðmundsson, Governor of the Central Bank of Iceland, in Session I in the conference “Fragmentation in the international financial system – can the global economy become one again?”, organised by the Central Bank of the Republic of Turkey and the Reinventing Bretton Woods Committee, Cappadocia, Turkey, 14 July 2012. *  *  *  For the most part, I will discuss some flaws in the international monetary and financial system(s) (IMFS) and in the European Union (EU) framework for cross-border banking and financial stability as they relate to both net capital flows and vulnerabilities in gross capital positions. My perspective on these issues is that of a policy-maker from a very small, open, and what used to be financially integrated economy, but it is also informed by the work I was involved in during my tenure at the Bank for International Settlements. The current international and monetary and financial system is in some sense a non-system, a hybrid of miscellaneous exchange rate regimes and diverse rules on cross-border capital flows and activities of financial institutions. This opens the door to country choices that, in the aggregate, cause and perpetuate global current account imbalances. This problem and its solution have been discussed extensively, and I will not dwell on that topic here.