In these situations it should of course be possible to use the monetary policy instruments to prevent a crisis.” (Government bill 1997/98:40 p. 54, my italics)  BIS central bankers’ speeches  7  In the present circumstances in Sweden I therefore see no clear signs of problems with financial stability, there is no lack of means to maintain financial stability and nor is there any reason to believe that higher policy rates would provide better outcomes for inflation and unemployment in the longer run. I shall elaborate further on this. Financial stability can be defined as a situation where the financial system is able to perform its most important functions – converting savings into funding, enabling risk management and mediating payments – and has sufficiently large resilience to shocks that may threaten these functions. Under normal circumstances, one can maintain financial stability with the aid of financial supervision and regulation and by publishing analyses and leading indicators, which can warn of threats to stability at an early stage. When it comes to financial stability, monetary policy should thus be the last line of defence, not the first. In Sweden, stricter capital requirements for the banks and minimum levels for liquidity measured by the Liquidity Coverage Ratio (LCR) and the share of stable funding measured by the Net Stable Funding Ratio (NSFR), according to the Basel III agreement and in accordance with the Riksbank’s recommendations in the latest Financial Stability Report (Sveriges Riksbank 2012a), provide better means to manage financial stability than the policy rate.
I would now like to discuss three questions in particular. The first is whether CSR is a stable concept or one that is still evolving? This concept broadly stems from that of sustainable development, which is defined as development that meets present needs without compromising the ability of future generations to meet their own. Its blueprint was set out at the 1992 UN Conference on Environment and Development in Rio de Janeiro (the first Earth Summit). It is based on the principle of development that is economically efficient, socially equitable and ecologically sustainable. CSR, whose initial objective was accountability, still largely appears to be an evolving paradigm closely linked to the current transition towards a new economic model. BIS Review 132/2008  1  In this respect, Rio brought to the fore the need for an ISO standard at the company level in order for companies themselves to take account of their impact and change their processes as part of a preventive approach. The UN addressed this dimension and brings together, under its aegis, the initiatives of the major companies that adhere to a relatively general charter. The Johannesburg World Summit on Sustainable Development (also known as Rio Plus 10 or the Second Earth Summit), largely focused on companies wishing to take centre stage in the protection of the planet and adopt a proactive role. The ethical dimension of CSR lends strength to the questions of stakeholders and employees as to how their funds are used.