After a quick look at the statistics, we can conclude that an average household of this type in Upplands Väsby has a total income of around SEK 44,000 a month after tax and a first mortgage of around SEK 1.75 million. A corresponding household in Luleå can be assumed to have a total income of approximately SEK 39,000 a month and a mortgage of approximately SEK 1.1 million. I am here talking about two average households without extremely high incomes or loans. The debt ratio, that is, the loan in relation to disposable income, is in this case 331 per cent for the family from Upplands Väsby and 235 per cent for the family in Luleå.17. For the family in Upplands Väsby this is just above the average in the country for households with mortgages, while the family in Luleå is well below average. At the same time, we know that it is not unusual for households to have debt ratios of 600 per cent, for example in central Stockholm. Let us therefore include one of these households in our comparison. For a similar family with two children in central Stockholm, with a total income after tax of almost SEK 55,000 per month, a loan of almost SEK 4 million entails a debt ratio of around 600 per cent. 16  According to the Financial Accounts, Swedish households’ debt currently amounts to around SEK 3,300 billion, while their disposable income amounts to a total of around SEK 1,900 billion, according to the National Accounts.
Let us assume that alternative A means that it is the central bank that accounts for both monetary policy and macroprudential policy (instead of the central bank and the financial supervisory authority coordinating them). If the central bank fails to stabilise the financial cycle, some argue that this could also jeopardise confidence in the bank’s ability to attain its traditional price stability target.9 It is therefore  6  The example is taken from Bryant, Henderson and Becker (2012). 7  Here one should regard the task as being to ensure that the financial cycle does not “go off the rails” rather than keeping it completely stable all of the time. In Figure 1, for instance, measures would need to be taken in connection with the last financial cycle, but not with the first. 8  See, for example, Svensson (2011). 9  See, for example, Smets (2013). 4  BIS central bankers’ speeches  better that another authority than the central bank should have responsibility for stabilising the financial cycle. That coordination is in theory preferable does not say anything about how great the benefits may be in practice. To illustrate the quantitative links between monetary policy and macroprudential policy, we need the help of macroeconomic models based on data for the specific country. Such models are currently being developed within several central banks.