Central government finances can be weakened so much that the country enters a debt crisis. From this point of view, it may be considered justifiable to make every effort to increase the resilience of the financial system. At the same time, it is important to always compare the cost of various types of measure with their benefit, so that we can design the most efficient system possible. I have presented a long list of possible instruments that could be used to conduct macroprudential supervision. By necessity, this list will include most tools, as different tools are needed to counteract different systemic risks. But we are discussing something that is relatively new. At present, we only have limited experience of conducting macroprudential supervision in practice. This means that the process of introducing macroprudential supervision will entail a certain degree of trial and error. Quite simply, we will have to test our way forward, while constantly doing our best to assess the efficiency of the instruments being employed. 13 The financial system is complex and dynamic, and the risk outlook is changing all the time. This means that it can never be determined with certainty where a financial crisis may arise. Bearing this in mind, it is important that we, in Sweden, construct a framework for macroprudential supervision that is flexible and that we do not limit our possibilities in terms of the instruments that can be used. It is also important to establish a process to evaluate and later develop and modify the toolbox.
This is primarily a matter of using tools aimed at financial companies, as it is within these companies that problems that may ultimately lead to a financial crisis can arise. But there may also be reason to use tools aimed at households and non-financial companies. Such tools can form important complements, for example by dampening demand for credit. Naturally, there are already policy areas that directly or indirectly influence financial stability. As regards the housing market, which is a sector that is creating a great deal of unease in Sweden due to high indebtedness and high prices, this is influenced by factors such as regulations for tax deductions for interest payments, changes to property tax, rent control and other regulations that affect incentives for housing construction. But decisions on measures in these areas are primarily taken on the basis of other goals than safeguarding the stability of the financial system. In micro supervision, which is the kind of supervision carried out by Finansinspektionen in Sweden, a series of different tools is also used to influence financial stability. However, at present, Finansinspektionen’s remit is focused on dampening risks among individual institutions, not in the system as a whole. What we need, quite simply, are specific tools for macroprudential supervision that can be used with the direct aim of promoting stability in the system. This will make it possible to counteract the systemic risks created by policies in other areas so that the system as a whole remains stable. The housing market is a good example of this.