This fall started earlier than in most other countries (see Figure 1). To counteract this development, the Riksbank started to cut the repo rate at the end of 2011. One circumstance that has a certain significance for my discussion going forward is that the Riksbank was already concerned about the rise in household debt and housing prices by this point. With the aim of contributing, to some extent, to dampening the build-up of debt and price increases, the repo rate was set slightly higher than otherwise would have been the case. 8 This is usually described as monetary policy ‘leaning against the wind’, where the wind represents some kind of financial imbalance that is deemed to be building up. However, what is important to understand is that, at this time, monetary policy was nevertheless largely governed by traditional monetary policy motives, that is, the expected development of economic activity and inflation over the coming years (see Figure 2). Risks linked to developments in household debt and housing prices were included in the assessment but did not play a leading role. I discussed this in detail in a speech a few years ago and, consequently, I shall not say much about it now. 9 But let me just emphasise that neither did other economic analysts consider that the monetary policy conducted was mainly a matter of the Riksbank  7 The CPIF is the CPI with a fixed interest rate.
Jaime Caruana: Contemporary issues in credit risk Keynote address by Mr Jaime Caruana, Governor of the Bank of Spain and Chairman of the Basel Committee on Banking Supervision, to the Credit Risk Summit USA 2003, sponsored by Risk Magazine, New York, 27 October 2003. *  *  *  Introduction I would like to thank Risk Magazine for inviting me to participate in this summit on contemporary issues in credit risk. Looking at the agenda, it is clear that, while credit may constitute the oldest risk in banking, it remains the most important and is still one where we have much to learn. There is a Latin proverb that says ‘Danger can never be overcome without taking risks’. As a supervisor, I would tend to rephrase that by saying that managing risks properly is the best way to overcome danger. I think this idea is at the core of any modern, innovative and dynamic economy. The next two days will no doubt offer a sense of the rich abundance of research under way to identify risks, to improve our measures for them, and to find better ways to address them. On this front, a risk manager and a bank supervisor share similar interests. A risk manager seeks the best risk measures and management techniques to protect a bank against losses, to hone its competitiveness, and to enhance its profitability and long-term growth. Supervisors advocate sound risk management practices to ensure the adequate capitalisation and prudent management of all banks.