The experiences indicate that financial crises are something we will have to live with. But to reduce the risks of financial crises, with major socioeconomic costs, central banks and other players need to have the mandates and tools to prevent financial crises, along with flexibility and liquidity when a crisis actually occurs. The challenges facing the Riksbank and other central banks, and which I have tried to describe in this speech, are partly the result of the experiences gained during the latest crisis. But they also have to do with more long-term structural changes in the financial system, such as globalisation and innovations in the mediation of payments and credit. The challenges also relate to monetary policy, and this is something that often receives a great deal of attention in the debate. But, as I hopefully have shown, there are many other and perhaps even more important areas where the need for new thinking is even greater. If you’ve been in the business since 1668, it’s important to think in new ways now and again. BIS central bankers’ speeches  17  References Acharya, V. (2015), “Financial Stability in the Broader Mandate for Central Banks: A Political Economy Perspective”, Hutchins Center Working Paper #11. Archer, D. and P. Moser-Boehm (2013), “Central bank finances,” BIS Papers, No. 71, Bank for International Settlements. Ball, Laurence M. (2014), “The case for a long-run inflation target of four percent,” IMF Working Paper, WP/14/92, International Monetary Fund.
Linked to this shift, a property debt overhang is leading businesses with such property exposures to experience more constrained access to finance, something that, other things equal, will take time to work through. Our evidence tends to support this dichotomy between the position of companies where commercial property is either the source of their business or the source of their security for borrowing, and those where there is no such dependence. The conclusions I draw from this are that as well as our part in creating the right incentives for credit to be on offer, there is a need to extend the work done by Kate and her colleagues, to consider information flows in terms of particularly of credit assessments, and the issue of whether some types of commercial property are acting as a restraint or access to finance. It is also consistent with comments I hear from businesses and banks that the “distribution” capacity of SME lending lags a long way behind the mortgage market. In conclusion, we are determined to put behind us the legacy of issues that have called into question the capital position of banks during the crisis. We are approaching the sixth anniversary of the start of the crisis, so this is hardly overly hasty action. The resilience of the financial system is our objective, but this is not just for its own sake but also to support the economy and credit creation.