Abstract

http://ssrn.com/abstract=1995973
 
 

References (20)



 
 

Footnotes (13)



 


 



Central-Banking Challenges for the Riksbank: Monetary Policy, Financial-Stability Policy and Asset Management


Lars E. O. Svensson


Sveriges Riksbank; Stockholm University - Institute for International Economic Studies (IIES); National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

February 2012

CEPR Discussion Paper No. DP8789

Abstract:     
The Riksbank faces challenges with regard to each of its three core functions, conducting monetary policy with the objective of stabilising inflation around the inflation target and resource utilisation around a sustainable level, promoting a safe and efficient payment system and thereby conducting a policy for financial stability, and managing its financial assets to attain a good risk-adjusted rate of return without prejudice to the first two core functions. I conclude that the challenges are best met by focusing monetary policy exclusively on stabilising inflation around the inflation target and resource utilisation around a sustainable level and not treating the policy rate, housing prices or household debt as separate explicit or implicit target variables, by not confusing monetary policy with financial-stability policy but treating them as separate policies, and by eliminating the large unnecessary currency risk in the Riksbank’s balance sheet.

Number of Pages in PDF File: 16

Keywords: central bank asset management, macroprudential policy, monetary policy

JEL Classification: E42, E52, E58, G18, G28

working papers series


Date posted: January 31, 2012  

Suggested Citation

Svensson, Lars E. O., Central-Banking Challenges for the Riksbank: Monetary Policy, Financial-Stability Policy and Asset Management (February 2012). CEPR Discussion Paper No. DP8789. Available at SSRN: http://ssrn.com/abstract=1995973

Contact Information

Lars E.O. Svensson (Contact Author)
Sveriges Riksbank ( email )
Brunkebergstorg 11
SE-103 37 Stockholm
Sweden
Stockholm University - Institute for International Economic Studies (IIES) ( email )
Stockholm University
10691 Stockholm, SE-10691
Sweden
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
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