I am, indeed, convinced that each of the six members will aim for as collegiate an attitude as possible. To me, this is already evident from the work to date. But it is also the case that, in making monetary policy, a variety of factors have to be weighted into an overall assessment of inflation’s future path. In weighing up the odds, different people may reach different conclusions, which need not be an entirely bad thing. It might even have the advantage of demonstrating that decisions on the monetary policy stance tend to involve assessments that are complex and tricky. From interviews and comments in the press, it is already evident that members of the Executive Board voice somewhat different shades of opinion in their inflation assessments. This, too, is something that all those who follow monetary policy will have to get used to. It is, moreover, an assurance that our discussions in the Riksbank will be properly informed about aspects of the BIS Review 14/1999  –2–  monetary policy stance. It is also consistent with the transparency that the Riksbank is striving for and which is a basic condition for the new legislation. The monetary policy situation Sweden’s economy in perspective In the years since the crisis in the early 1990s, economic development in Sweden has been rather good. Growth has been relatively high, yet inflation has been kept at a low level. Since summer 1993, annual GDP growth has averaged almost 3%.
In the euro area economies, the high unemployment levels and the need to reduce significant debt ratios curbed the expansion of demand, while the fragility of banking systems hampered the transmission of monetary policy measures to the real economy. These factors obliged the ECB to take a different tack and turn to so-called nonconventional measures. Firstly, the interest rates on ordinary monetary policy operations were successively cut, placing the deposit facility rate at a negative level of -0.4%, which currently remains in place. Secondly, the ECB introduced a new long-term financing facility for the banking system, which was linked to the granting of loans to households and firms. Thirdly, in 2015, the ECB took the historic step of launching a quantitative easing programme by means of the large-scale purchase of public and private assets. Currently, purchases are being made at a monthly pace of € billion, and this is expected to continue at least until next December, whereby at the end of the current year the scale of asset purchases will be drawing close to 22% of euro area GDP. Lastly, communication has become a most important instrument for influencing agents’ expectations and heightening the effectiveness of measures. Specifically, the ECB has incorporated forward guidance on interest rates and the purchase programme into its communication.