To add some context to the option of bond purchases, it is important to note that the Swedish central government debt is small in relation to GDP, compared with, for example, the euro area and the United States. This sets a limit as to what is an appropriate amount of government bond purchases for monetary policy purposes. The Riksbank’s bond purchases for monetary policy purposes corresponds  10  This raises the issue of what the mandate of central banks should look like. In practice, there are a number of different market failures that monetary policy might try to correct. Incomplete information about the aggregate economy and the implications of this for price- and wage-setting, i.e. so-called price and wage rigidities, is a central part of the simplest conceptual framework of central banks. Prior to the global financial crisis of 2008–09, there was over-confidence in the ability of financial markets to correctly price risks. In the wake of the financial crisis, a discussion has emerged as to whether central banks should consider systemic risks that arise due to driving-forces that encourage excessive risk-taking and indebtedness. 11 See Bolton et al. (2020), Carney (2015) and Carney et al. (2019). 12 See Brunnermeier and Koby (2018). 7 [18]  to about 7 per cent of Swedish GDP, while the ECB’s and Fed’s programmes correspond to more than 20 per cent of GDP. The Riksbank, like the ECB, has the opportunity to broaden its asset purchases to include other types of bonds.
This is especially important just now as there is very considerable uncertainty about the future and the Riksbank’s toolbox is perceived to be limited or even exhausted. Third, because it is important to analyse and discuss whether and if so what central banks, including the Riksbank, can and should do to combat climate change. I will argue that the Riksbank can act with strength and security in an economic crisis, and I will exemplify this in the form of a financial crisis triggered by climaterelated events. The Riksbank’s toolbox has changed but it is not empty. But in order for our measures to have a profound impact, we need to work together with other authorities. Good cooperation with other authorities and in international networks is also key when it comes to the Riksbank’s scope for contributing to climate adaptation. The Riksbank can contribute to a more sustainable future, but only as a complement to other effective climate policy. The Riksbank and other central banks will not be able to replace the need for an effective climate policy that should be focused on setting a price on carbon emissions. Let me begin by focusing on the issue of how the Swedish economy is affected by climate change. The climate and its effect on the economy and the financial system The climate is a particularly complicated system. This means that the economic consequences of climate change are difficult to predict.