Accordingly, we should care much more about longer-term movements in financial conditions than about higher-frequency, transitory movements. That is because behavior in firms and households will be influenced much more by how financial conditions evolve over time, rather than by where they happen to be at a particular moment. To emphasize this point, let me give two contrasting examples—one where financial conditions moved sharply but not persistently, and another where financial conditions moved systematically over a longer time period. We will see that it is the long-lived movements that have the largest influence on the economic outlook. For the first example, consider the U.S. equity market in 1987. The S&P 500 index began the year at 242, shot up to a peak of 337 in August (an increase of almost 40 percent) and plummeted to a trough of 225 in October (a fall of 33 percent). When the stock market fell more than 20 percent on October 19th—which came to be known as “Black Monday”—many feared that the decline would lead to a recession. After all, that crash was the largest-ever one-day percentage decline of the U.S. stock market. But, no recession occurred. Importantly, households sustained their spending despite the sharp decline in household wealth. This happened, in part, because household spending had not yet responded much to the sharp run-up in stock prices earlier in the year, so consumer spending turned out to be relatively insensitive to the market’s sharp reversal.
To make the choice of path regarding digitalisation of the payment market easier, we need a clear Swedish stance that is based on political priorities and decisions. This includes a review of the Sveriges Riksbank Act that clarifies the Riksbank's mandate. It is also important to cooperate with other public authorities. The e-krona would have points of contact with many other authorities, for instance the tax account, to which all those who are to pay tax receive access, functions as a form of state money. It is possible that the best solution would be to build an e-krona system together with other authorities. It would also be good if the legislation in this field in Sweden was updated to take into account the fact that payments will in future be made digitally. If the means 8 See, for instance, Project Jasper https://www.payments.ca/sites/default/files/29-Sep-17/jasper_re-  port_eng.pdf, Project Ubin http://www.mas.gov.sg/Singapore-Financial-Centre/Smart-Financial-Centre/ProjectUbin.aspx and Project Stella https://www.ecb.europa.eu/pub/pdf/other/stella_project_leaflet_march_2018.pdf. 4 [9]  of payment issued by the Riksbank is not generally accepted, it will be difficult for the Riksbank to perform its task of promoting a safe and efficient payment system. According to the Sveriges Riksbank Act, the Swedish krona, in the form of cash, is legal tender. But at the same time, it is possible to waive the obligation to accept cash by, for instance, putting up a sign that cash is not accepted. As the use of cash is declining rapidly, it is urgent that the legislator takes a stance on what status in the law legal tender shall have.