We have no convincing answer to why Swedish consumers are less willing to use card payments than are their Nordic neighbours. One possible explanation is that card payments are, or are just considered to be, more costly, more complicated or more risky, in Sweden than elsewhere, by consumers or by terminal keepers. I will come back to this issue later. 2. Swedish consumers use debit cards rather than credit cards (fig. 2). Concerning preferences between debit and credit cards, clearly, Swedish card users favour debit cards, both in terms of value and volumes of transaction. In the year 2001, the number of debit card transactions amounted to just above 80 per cent of the total. Charge cards dominate the remaining 20 per cent. Credit cards with revolving credit arrangements do not seem to appeal to Swedes. In this respect, Swedish consumers' preferences are in line with those of consumers in the other Nordic countries and with those of continental Europeans. On the other hand, consumers in Anglo-Saxon countries seem to demand pure credit cards to a larger extent. Cultural factors may account for the different preferences between credit and debit card products. At least in Sweden, consuming out of credit is still considered to be somewhat irresponsible. In the old days of bank regulation, banks were not supposed to give credit for consumption purposes since available credit recourses should be channelled into productive investments. 3. The use of checks is negligible (fig. 3).
This meant that interest rates in several countries that had previously had a higher interest rate than Germany were reduced to a common euro level. In these countries, this contributed to a dramatic expansion of credit, rapid growth and a high level of inflation. In addition, regulation and supervision of the financial markets were national processes, despite that fact that the operations concerned were crossborder. However, it did not become apparent that this situation was untenable until the spring of 2010 in connection with the crisis in public finances in Europe. Each country certainly believed that they had good reasons for conducting their particular choice of monetary policy. But for the world as a whole, which in itself is a closed economy in which overall monetary policy affects growth and inflation, monetary policy became too expansionary. This resulted in strong GDP growth and rapidly increasing prices for crude oil and other commodities, as well as a rapid credit expansion and rising asset prices, above all for housing in certain regions. This ultimately led to the financial crisis when the housingprice bubble burst. Now, you may say that it is rather pointless to criticise something with hindsight. It is easy to say now what should have been done then. However, my point is not to criticise what was done but to learn from history. Even today, we can see the same pattern: that is an expansionary monetary policy for the world as a whole, strong growth and rising energy and commodity prices.