In Stockholm city centre investors in the property market are not requiring any higher earnings than a risk-free five-year government bond provides. It may be the case that the required rate of return has begun to rise more in general, but that this has not been captured in the statistics (see figure 5). It is difficult to determine what direction prices for office premises will take. Rising risk premiums indicate that prices should be pushed down. At the same time, however, the rental market is currently relatively strong. As the service sector is office-intensive, activity in this sector affects the possibilities for leasing. But there is considerable sensitivity to weaker economic activity. BIS Review 60/2008  3  In the autumn Financial Stability Report the Riksbank saw a risk that expectations of future increases in income in the property market were too high. We thus saw the risk of a fall in prices. Since then the required rate of return has risen with regard to commercial property around the world, while economic activity is more uncertain. This should reasonably have an effect on prices in the Swedish property market (see figure 6). The property market remains a hot topic and those who are interested can read more about the property market and commercial property in the Riksbank's next Financial Stability Report, which will be published on 3 June. Let me conclude with a few words on the financial markets.
Michael C Bonello: The adoption of the euro by new member states challenges and vulnerabilities Speech by Mr Michael C Bonello, Governor of the Central Bank of Malta, at the SUERF Seminar organised by the Central Bank of Malta, Valletta, 4 May 2006. The references for the speech can be found on the Central Bank of Malta’s website. *  *  *  Distinguished Guests, Ladies and Gentlemen I would first like to welcome you all to this seminar which has been jointly organised by the European Money and Finance Forum (SUERF) and the Central Bank of Malta. A special greeting goes to our foreign participants and guests, including some fifty members of SUERF from twenty-three countries. The topic chosen for the seminar is particularly appropriate at a time when the ten NMS have just entered their third year of EU membership and are increasingly focusing their attention on monetary union. In these introductory comments I shall, therefore, attempt to highlight some key issues which must be dealt with on the path towards the adoption of the euro. As our policy makers have become acutely aware during the past two years, this path is characterised by manifold challenges and vulnerabilities, not least those associated with real convergence, fiscal consolidation and capital account volatility.