Per Jansson: Perspectives on the Riksbank’s monetary policy Speech by Mr Per Jansson, Deputy Governor of the Sveriges Riksbank, at the Centre for Business and Policy Studies, Stockholm, 7 June 2013. * * * Nowadays one can hardly open a newspaper without seeing headlines about the Riksbank. Many have opinions about the monetary policy we have conducted in recent years, and the one we are conducting now. The opinions differ in nature. The Riksbank has conducted the monetary policy we consider best balanced to attain the inflation target and create conditions for long-run sustainable growth. However, some analysts have not shared the Riksbank's view of economic prospects and have therefore reached slightly different conclusions as to how monetary policy should have been designed. Of course, this type of difference of opinion is not particularly remarkable in a field such as monetary policy, where decisions necessarily have to be based on assessments. But there are also other objections that are more a matter of principle and aimed at the very way the Riksbank conducts its policy. Although it is not always stated explicitly, the message is that the Riksbank is conducting a policy other than the one it is intended to conduct – that, to put it drastically, the Riksbank has misunderstood its task and is "playing by its own rules". It has been claimed, for instance, that the Riksbank has a tendency to be over-zealous in combating inflation and to care too little about unemployment.
Since the CDFIs have the relationships with the small businesses, partnerships between banks and CDFIs that increase the lending capacity of the CDFIs could be helpful. Possible avenues to achieving this include partnerships between CDFIs and banks, as well as assisting CDFIs to better access funding from the Federal Home Loan Bank (FHLB) system. I would like to touch on three additional issues that I think would assist small businesses to be successful: financial education, certification of community organizations that assist small businesses and greater transparency for small business lending. Establishing a thriving small business takes more than a good idea and hard work. While both of these are essential, there are many other factors that come into play. It is important that people starting businesses have access to financial information that will assist them in navigating the difficult way forward. This assistance can include how to develop a sound business plan, how to enhance their credit profile, how to avoid early pitfalls such as obtaining financing with punitive interest rates and how to cultivate a banking relationship. These will all increase the likelihood that the small business will have access to the credit it needs over time to grow and thrive. CDFIs have been an important source of this financial education to small businesses, and these efforts should be supported and expanded. It is critical that small businesses also know that the organizations they work with are reputable and knowledgeable.