They are also to consult with one another prior to decisions on applying macroprudential tools. The committee does not offer any suggestions as to which macroprudential tools are needed or how they should be divided between the authorities. My assessment is therefore that the Financial Crisis Committee’s proposal, which means that both the Riksbank and Finansinspektionen will become macroprudential bodies, does not fulfil the important criteria regarding decision-making powers, independence and accountability. And nor does the proposal appear to be in line with the ESRB’s recommendation. …and differs from the practice that is emerging in Europe Moreover, the Financial Crisis Committee’s proposals differ from the structures emerging in other EU countries. Two models are predominant in this context, and both of them are in line with the ESRB’s recommendation. Either the responsibility for macroprudential policy is given to the central bank, as in the United Kingdom, or it is given to a number of authorities, with the central bank playing the leading role, expressed for instance in the form of a chairmanship or right of veto, as in the case of Germany. If the council’s solution is chosen, the council normally also confers the right of making recommendations regarding macroprudential measures.
As regards monetary policy, the Bank of Russia set itself the task of reducing inflation from the level at that time of 7% to 3-4%. But, as you will see, we also noted that the rate of decline must be dictated by the economic situation. Therefore, due to external shocks, achieving this target took longer than expected. However we are already very close to the target level. The second objective in terms of monetary policy which we set ourselves four years ago was to increase the flexibility of the exchange rate. We have moved to a floating exchange rate and consider this to have been the right decision, as the negative experiences of other exporting countries that did not switch to a floating exchange rate prove to us that this needed to be done. Within the banking sector, we set ourselves the tasks of strengthening supervision and withdrawing from the market of weak players. Unfortunately, accumulated problems in the banking sector turned out to be more serious than was assumed four years ago. And this situation has only been aggravated by crisis. The process of cleaning up the banking sector is not yet complete and, according to our estimates, will take another 2-3 years. Strengthening supervision will require us to restructure internal organisation significantly – a process we are currently undergoing. Four years ago we decided to establish a mega-regulator. We were handed responsibility for the regulation and supervision across all sectors of the financial market, numbering 20 thousand supervised units.