Second, some EU bodies are obsessed with the “all EU countries must be same” approach. While there may be some point to this, why insist on it in the case of the single resolution system, for instance, if it has been negotiated that the SSM only applies to euro-area countries plus volunteers? One can hardly expect non-euro area countries not participating in the SSM to jump at the single resolution system if it means sharing the burden with those inside the banking union without the same treatment in the area of a fiscal back-stop. At the same time, would you join the SSM if you did not have a clue how the single resolution rules were going to work? The CNB’s position was: let’s discuss the whole thing (BU) in one shot as a one compact and coherent package where the balance between powers, duties, responsibilities and money always remains assured. And negotiate everything as a single animal, so that illogical inconsistencies are not being produced all along. Sure, that would take much more time, but the final outcome might look better and we would not build up the house from the roof down. We are debating the supervisory part first, while burden-sharing (money) is being left for the future. The sequence of steps should ideally be exactly the opposite one. Why? My observation is that the way the various bail-outs and the SSM have been negotiated so far shows that the readiness and willingness even among euro-area countries to share money is declining over time.
Jan F Qvigstad: Comments on Lars E O Svensson's lecture "Policy expectations and policy evaluations – the role of transparency and communication" Speech by Mr Jan F Qvigstad, Deputy Governor of Norges Bank (Central Bank of Norway), at the conference "Ten Years of Riksbank Independence", Stockholm, 11 September 2009. *  *  *  Introduction It was a great pleasure to accept the invitation to discuss professor and fellow central bank deputy governor Lars Svensson’s lecture in connection with the tenth anniversary of Riksbank independence. In his lecture, Lars Svensson discussed communication, credibility and monetary policy evaluation. He looks at general issues for central banks seeking to influence key rate expectations, using the Riksbank as an example. 1 I will not venture to remark on the Riksbank’s assessments but will offer my comments on the same issues in the light of Norges Bank’s experience of interest rate forecasts. There are a number of similarities between the communication strategies of the Riksbank and Norges Bank. And underlying these strategies is a model developed by, among others, Lars Svensson. In his lecture today, he described how to arrive at an interest rate path that “looks good”. He showed, as he has on many previous occasions, that this can be formalised by finding the interest rate path that minimises a given loss function. When does the interest rate “look good”? Svensson raises the issue of whether monetary policy is well balanced, not only ex-post but also ex-ante.