In this case it is quite possible that it will need to be raised by more than  15  8  Monetary Policy Report 1, 2011, pages 17–19, Norges Bank. BIS central bankers’ speeches  0.25 percentage points at one or more meetings and that it will need to be increased to 4 per cent already next year. Resource utilisation In my overall assessment, resource utilisation is more or less normal at present and with the present forecasts it will be higher than normal and rising towards the end of the forecast period. This also indicates the need for a higher repo-rate path than the presented path. The Riksbank uses several different measures of resource utilisation. According to these measures, the GDP gap, for example, will be approximately –1 per cent in the first quarter of 2011. My own assessment is that it will be a little higher than this, more or less zero. The level indicated by the so-called RU indicator also supports the claim that resource utilisation is largely normal. The RU indicator, which has been developed by the Riksbank and weighs together a large number of indicators to form a summary measure of resource utilisation, reached a normal level already in the fourth quarter of 2010. Several other measures also indicate that resource utilisation is normal (see Figure 19). Unemployment, on the other hand, is still higher than normal.
They were also implemented during a limited period of time and thus did not become part of a more permanent support system. The Riksbank thus reacted quickly to the problems that arose. Of course, the Swedish banks were not exposed to the US housing market to any great extent. But they were dependent on the markets functioning in order to get funding. In order to cover the loss of normal funding channels, the Riksbank provided loans of approximately SEK 500 billion during the autumn of 2008.12 This increased the Riksbank’s balance sheet total from approximately 7 per cent to approximately 22 per cent of GDP, that is more than the balance sheets of the Federal Reserve (FED) and the European Central Bank (ECB) in relation to GDP. Around half of this lending was in kronor and half in dollars. In order to be able to lend so much in dollars, the Riksbank borrowed dollars from the FED through a rapidly-concluded swap agreement. The Riksbank’s own dollar assets were far too small. In the autumn of 2008, the foreign currency reserve corresponded to SEK 200 billion and was invested in a number of different currencies. In 2009, the reserve was strengthened by borrowing approximately SEK 100 billion via the Swedish National Debt Office (see Figure 14). Monetary policy also reacted quickly and forcefully. The repo rate was cut rapidly from 4.75 per cent in September 2008 to 0.25 per cent in July 2009. The largest cut came already in December 2008.