The stability of the financial system was thus definitely never threatened. But it is regrettable that we still have not managed to create  BIS Review 30/2008  7  an adequate regulatory framework in this field, more than fifteen years after our own bank crisis. In countries where they have slightly more experience of bank failures, such as the United States and Canada, they have learn that special institutions and arrangements are required to manage institutions that are experiencing financial problems. One of the most important lessons is that the authorities must be able to intervene as quickly as possible when a bank faces problems. There are several reasons for this. The first is to put pressure on the management and owners of the bank to rectify the situation and hopefully to prevent the situation deteriorating further. The so-called Savings and Loans crisis in the United States in the 1980s become more costly when the authorities failed to take action in time. This meant that in the United States at the beginning of the 1990s they introduced a system with so-called prompt corrective action. This means that the authorities quite simply are obliged by law to intervene at certain specified thresholds. In my opinion it is desirable that Finansinspektionen (the Swedish Financial Supervisory Authority) should also have a large toolbox of measures that can be taken at an early stage. It should be possible to intensify these measures gradually as problems worsen.
Determining what might have happened if the authorities had acted otherwise is no easy task. Allow me to present a hypothetical example: The central bank thinks financial imbalances are building up, and the Executive Board sets the key rate higher than it otherwise would have done. While a financial crisis does not actually materialise, unemployment rises and economic growth slows. Inflation could fall below target. In this situation, it may be difficult to assess whether the Board made a good decision to raise the key rate. Such assessments of motives and outcomes are also the subject of moral philosophy and its discussion of what constitutes a good decision. In setting the key rate, both intentionalist and deontological ethics will provide us with the same guidance as to what good decisions are. In both cases, the decision must be based on achieving the objective of monetary policy, and  35  A fundamental principle of criminal law is that a person can only be judged if that person can be charged with a criminal offence and is proven guilty. There are two forms of guilt: One is guilty with intent, which typically means that the offender intended to produce the negative outcome. The other form of guilt is negligence, which somewhat simplified implies a failure to use reasonable care or prudence. In determining whether an offender has acted with negligence, his behaviour must be measured against ordinary reasonable and prudent behaviour in a comparable situation. A Supreme Court ruling from 1984 provides an illustration of negligence consideration.