Who would want to come to the rescue of a country that is not prepared to pay the cost of a reasonable insurance? Let me make a comparison. Some years ago, Sweden chose to re prioritise within its defence forces, and the compulsory military service system was abolished. Now that uncertainty in global policy has increased, the Swedish defence budget has increased, and compulsory military service is being considered again. It is quite simply safer to have, for instance, a number of JAS fighter planes on standby than to rely on being able to rent them if one needs them, partly because in an acute situation it would probably take too long and because it would be difficult and expensive. Foreign currency reserve – part of Sweden's economic defence Similarly, we can regard the foreign currency reserve as part of Sweden's economic defence. The advantage of having a foreign currency reserve is that it can quickly be made available for liquidity support to the banking system if an acute need were to arise. A foreign currency reserve can also prevent a financial crisis by creating confidence in the central bank’s ability to take action when necessary. This is particularly important in a situation where market confidence in the country’s credit and payments systems is under pressure. If you say it could never happen to Sweden, let me remind you of Ireland and Iceland.
One of the most comprehensive evidence has been produced for New Zealand’s firms, showing that inflation expectations among business leaders are not so different from household expectations. In Europe, Banca d’Italia has also developed a very rich and informative firms’ expectations survey since 1999. The Bundesbank has also conducted a very interesting survey asking tradeunions and employers what was the relevant inflation underlying the last collective wage agreement. Comparative information on such issues across the Euro area would be very useful. I am convinced that more analysis on firms’ expectations would produce very valuable and relevant information for our monetary policy. Conclusion Let me now conclude by saying that we need to better measure consumer and firm inflation expectations. This lack of information prevents our communication policies from being fully efficient. One important question for monetary policy is what kind of communication tools can be used to better communicate with the general public and influence their inflation expectations. This conference is a unique opportunity to benefit from the analyses of the most distinguished experts on the various exciting issues that are related to household expectations. I wish you very fruitful discussions. Thank you for your attention. 4  Figure 1. Long term inflation expectations for the Euro area  Source: BIS report “Recent developments in the global economy” (August 2019) -  5  Figure 2. Households perceive quite well the overall evolution of inflation  Source: B. Coeuré (2019).