A higher repo rate with then be needed in order to keep inflation close to the target. Conclusion Today I have spoken about the situation in Sweden and abroad: partly about our dependence on events abroad and partly about what we ourselves can do to smooth the course of development in the Swedish economy. I have previously described the crisis in the early 1990s like this: “Things were quite OK abroad, but Sweden was not OK”. At the time of the crisis in 2008 the situation was the opposite: “Things were not OK abroad, but Sweden was OK”. Recent developments abroad have been marked by great uncertainty. Sweden is highly affected by this uncertainty. With the help of monetary policy we can do all that we can to promote a stable development of the Swedish economy: that is ensure that inflation stays close to the target and that the development of the real economy is as stable as possible.
The US  2  BIS central bankers’ speeches  economy was in many senses the epicentre of the financial crisis. There are a number of problems that need to be dealt with. First, many households in the United States have fallen into difficulties because their debts exceed the value of their homes. The households have therefore needed to increase their saving, which they have done. As a result, private consumption has grown slowly for some time but does have the potential to recover in the period ahead. Second, public finances are weak in the United States too (see Figure 9). The situation became more dramatic in the summer when the country’s credit rating was reduced. The political deadlock in the US Congress was one of the main reasons for this. A major advantage in the United States is that, so far, government bond rates have remained very low (see Figure 2). However, it is important that these problems are resolved so that this positive trend can continue and so that interest rates do not begin rising as they have done in several countries in southern Europe. There are, however, a number of bright spots with regard to the US economy. One is that the companies are making good profits. We have to go all the way back to the early 1950s to find as high a level of profits in relation to GDP as there is now. When confidence returns there is therefore every chance that investment and employment will recover.