Martin Flodén: To the Zero Bound and Beyond: Swedish experiences
Deputy Governor Martin Flodén spoke on Friday at the Royal Bank of Scotland's conference "To Zero Bound and Beyond" in Edinburgh. There he discussed the Swedish experiences of a negative repo rate and purchases of government bonds.
Mr Flodén observed that the negative policy rate has had a fairly normal impact on the economy and that the purchases of government bonds appear to have led to lower long-term rates, especially in relation to other countries. This shows that the monetary policy conducted has an effect. He also looked ahead. "Monetary policy needs to be expansionary until we are confident that inflation has permanently been established at a much higher level." Mr Flodén said in this context that the Riksbank has other unconventional measures it can use if necessary, but that the choice of tool must depend on an evaluation of costs and benefits.
Follow the link to see the slides Mr Flodén showed during his presentation at the Royal Bank of Scotland conference.