Martin Flodén: Communicating future monetary policy – reflections after eleven years as member of the Sveriges Riksbank's Executive Board

Speech by Mr Martin Flodén, Deputy Governor of the Sveriges Riksbank, at Nordea, Stockholm, 17 April 2024.

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

Thanks for the invitation to come here!

As this is one of the last speeches I will give before I leave the Riksbank, I would like to take this opportunity to look back over time as member of the Executive Board. It has been an eventful eleven years, which of course cannot be easily summarised in one brief speech. I will therefore focus on something that throughout this period has been central to our work, namely our monetary policy communication. More specifically, I am thinking here about how we use the forecast for the policy rate and the minutes of the monetary policy meetings, where the Riksbank has chosen a different path from many other central banks.

Our aim is to communicate as clearly as possible both about the motives behind the monetary policy we are conducting now, and about how it may develop going forward. This is not an easy task. The economy is constantly being subjected to new shocks to which we must adapt. Our communication must relate to monetary policy navigating its way in an uncertain world, but without being void of content. Today I shall try to illustrate some of the problems we have faced, and some of the lessons learned from occasions when we ought perhaps to have communicated more effectively.

From secrecy to transparency

Let me first take a few steps back in time. Common to almost all central banks is that their communication changed completely in the 1990s and early 2000s. Previously, monetary policy was linked to secrecy and mystery. Two quotations are often used to illustrate this:

"Never explain, never excuse" by Montagu Norman, Governor of the Bank of England 1920-1944.