Stefan Ingves: Monetary policy in a changing world

Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank, at Business Arena Stockholm, 12 December 2020.

The views expressed in this speech are those of the speaker and not the view of the BIS.

The slides can be found on the Sveriges Riksbanks website.

We have had a dramatic year in 2020, when a lot has changed in our lives. For members of staff and for us in the Riksbank's Executive Board, the year has brought intensive work to manage the effects the coronavirus pandemic has had on the Swedish economy.

Our focus has been on ensuring that there is good access to liquidity and keeping interest rates low. We have wanted to provide the economy with the best conditions possible to recover after the coronavirus pandemic and, as usual, to get inflation to develop in line with the inflation target.

In many ways, our measures have resembled those of other central banks. However, compared with the period before the financial crisis, just over ten years ago, monetary policy has changed radically, above all because the monetary policy toolbox today looks very different. Back then, adjustments of the policy rate were seen as the only monetary policy tool. These days, most central banks work with several tools, some of them modern iterations of older approaches, both in times of crisis and in more normal times. Monetary policy and the way we 'do' monetary policy has changed, but the objective of attaining the inflation target still remains. And all the time, we need to stand ready to develop new tools and make new kinds of analysis – so that we can reach our inflation target. If the world changes, we need to change with it.