Stefan Ingves: New financial environment - how is the Riksbank meeting the new challenges?

Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank, at the Swedish Economics Association, digitally, 31 May 2021.

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

Accompanying slides of the speech.

Thank you for inviting me here to the Swedish Economics Association to speak again this year. I always enjoy coming to speak to you as it gives me the opportunity to discuss a subject in greater depth. But this year I intend to take a somewhat broader perspective and talk about the Riksbank's three main business areas: payments, monetary policy and financial stability.

In the public debate, there is often a tendency to focus on one area at a time. Recently, for instance, payments have been in focus as a lot is happening in the payments market. Monetary policy is almost always in focus, but often without mentioning that financial stability is a necessary condition for price stability. But it is fairly natural that this is the case, if only because it is difficult to be an expert in all of these areas at the same time.

During my professional life, I have had the privilege of being responsible for each of these areas at some point. I have also experienced what it is like when one of them is not functioning, and how this affects the other areas. This has helped me to better understand how the different areas are inter-dependent. If we do not have financial stability, then monetary policy will not function as it should and the payment system risks failing. If the payment system does not function, this leads to risks for both financial stability and monetary policy. If we do not have price stability, there will be consequences for both financial stability and payments.