Governor Stefan Ingves would not discuss the interest rate policy of the financial supervisory authority. “It is incumbent upon the executive board to set the interest rate,” he says.
the Riksbank has to follow their rules when it comes to conducting monetary policy, and thus can the Swedish financial supervisory authority director general Erik Thedéen not expect any sympathy for his thoughts on the Riksbank should “consider the monetary policy approach”.
It said the governor Stefan Ingves at a press briefing on Wednesday.
Erik Thedéen in the past month expressed frustration that the other actors ‘ policy influences the financial supervisory authority mission to manage the elevated risks associated with household indebtedness. It applies to tax policy as well as monetary policy, and he has hinted that the Riksbank should perhaps consider letting it take any longer for inflation to reach the target.
Stefan Ingves, however, is not ready to go Erik Thedéen to the meeting.
“We have not discussed at all with the Swedish financial supervisory authority as regards Swedish monetary policy, therefore, that it is incumbent upon the executive board to set the interest rate. And in this sense, we follow to the letter the regulations that exist,” he said at the pressträffen.
the Governor added, however, that he can understand Erik Thedéens frustration when it comes to managing the housing market and bolånefrågorna.
“Powers is not on the Fsa in terms of the questions, so even he is difficult to handle it on the edge,” he said.
“It is just another way to express this frustration that we have so enormously difficult to manage issues regarding the housing market in this country – which then, in turn, affects what is happening in the markets and, unfortunately, in a bad scenario can affect thousands of households, very negative if you borrow too much,” continued Stefan Ingves.
He regretted that there has been, and is, a political unwillingness to tackle the structural problems on the Swedish housing market.
“But it is also the case that given the regulatory framework that has evolved over time so has the political side to that the Riksbank does not have anything other than the interest rate. The conduct of macroprudential policy lies elsewhere, and they have also difficulties on the edge to make decisions,” said Stefan Ingves.
He noted, however, that the issue had been raised during the Financial stabilitetsrådets meeting on 7 december. According to the governor, it was a good discussion in the sense that everyone was in agreement that there are troubles in the mortgage market and that these need to be handled.
“It’s a step forward, even if it is baby steps, in relation to the past when the discussion rather focused on to what extent it was a problem or not. We have taken a step on the way, but then it is to do something about it”, said Stefan Ingves.
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