On 1 January 1999, a new Riksbank Act came into force. It states that the goal for the Riksbank’s activity is to maintain stable prices. The Riksbank shall also be responsible for a secure, efficient payment system. In the preparatory legal material on the Act, it is also further stated that the Riksbank, without setting aside the price stability target, shall also support the objectives of general economic policy with a view to achieving sustainable growth and high employment. The price stability goal has then been confirmed by law. The Riksbank’s Executive Board is responsible for making the price stability goal operational and designing the framework for monetary policy. Among other things, this means that the Executive Board decides on how the price stability goal is to be defined and over what period price stability is to be maintained. The Executive Board of the Riksbank has decided that price stability shall be defined as an annual increase in the consumer price index of 2% with a tolerance interval of plus/minus one percentage point. If the consumer price index is affected by factors that are considered to only have a temporary effect on CPI, the Executive Board has agreed that we shall be able to disregard this. The reason is that monetary policy otherwise risks leading to unnecessary fluctuations in employment and production. A lot has been achieved although some things remain to be done Economic policy has been very successful in many areas during recent years.
To move towards a more resilient global system, the euro should play a more important international role. It is at least a credible complement to the dollar as a safe asset. More broadly, in present adverse circumstances, we should assign top priority to two courses of action. First, designing a consistent regulatory and monitoring framework to ensure that the development of crypto-assets does not undermine confidence in the financial system. The recent turmoil that has affected all types of players within the crypto-asset ecosystem (stablecoins, DeFi protocol, lending platforms, hedge funds) has highlighted yet again the intrisic weaknesses of this market and the necessity to have a comprehensive regulatory framework at the international level. In this sense, I welcome the upcoming update by the FSB of its high-level recommendations on the regulation and supervision for global stablecoin arrangements and other types of crypto-assets. In 2023, we will have a global, consistent and comprehensive framework to tackle crypto-assets. The speed of implementation by jurisdictions will be key. In the implementation path, a critical aspect will be our ability to collect and share reliable data on the crypto asset markets. But regulation cannot be central banks’ only answer: it has to be accompanied by their own innovations. The main rationale for central bank digital currencies is to preserve the role of public money in a fast-moving economy.