Until now, the contribution of prudential regulation to international competitiveness and growth has not been a focus of research in academia or the regulatory and central banking community. More research and debate with practitioners, academics and regulators will help us deliver our new objective and will help us understand how to measure and report on how well we are doing. This is why I am delighted to announce that we will be holding an international conference on 19 September to deepen our understanding of the links between prudential regulation, international competitiveness, and growth. I hope that the conference, which will be held after the Financial Services and Markets Bill is expected to be enacted, will kick off the next stage of a debate about how we can pursue our new objective. We would also like to share at the conference ideas about the information – including quantitative metrics – that could be provided to Parliament so that they can judge our performance. This is important because I recognise that we regulators shouldn’t be judged on our words alone. It is right that Parliament have access to timely, informative, and transparent information on what we are doing. But any measures should be about what the PRA can control, and not what it can’t. They should be about our work strengthening the regulatory foundations that support our likely new objective.
Figure 15 shows that the population has increased much more than the number of completed homes over the past ten years, which is an indication that housing construction has been too low. Despite housing investment now increasing, it is important that structural problems on the housing market are discussed so that we can obtain greater efficiency on this market in the longer run. Several inquiries have put forward proposals regarding what needs to be done, most recently this was done in an annex to the Long Term Survey of the Swedish Economy. Not having an efficient housing market is not merely a problem for indebtedness, it can also comprise a threat to a healthy development of society and it can create conflicts between the generations. The Riksbank has long pointed out the risks linked to the high level of household indebtedness and has previously also weighed in them in the repo-rate decisions to some extent, by setting the rate somewhat higher than would otherwise have been the case. However, the effect these considerations have actually had on monetary policy – the amount by which the repo rate has actually been set higher – has been exaggerated substantially. There are quite simply limits as to how far the policy rate can be used for this purpose. And 6  BIS central bankers’ speeches  let me emphasise that the main focus for monetary policy has always been to bring inflation back on target and to attain a good development in the real economy.