New external evaluation of the Riksbank's monetary policy

Date 17/06/2014

This is the third time the Riksdag Committee on Finance has commissioned an independent evaluation of monetary policy and the evaluation, which should be complete towards the end of 2015, will examine whether interest rates have been well-balanced and whether monetary policy has attained its objective. The evaluation also includes analysing and assessing the Riksbank's decision to include the risks linked to the high level of household indebtedness. King and Goodfriend will also examine the formulation of the Swedish inflation target, the flexible inflation-targeting policy and the Riksbank's inflation forecasts during the evaluation period.

Sir Mervyn King has worked at the Bank of England since 1991 and was Governor of the bank for 10 years. He left his post there in the middle of 2013. He has previously been professor at London School of Economics, where among other things he founded the research institution known as the Financial Market Group. Since July 2013, Sir Mervyn King has been a member of the House of Lords, with the title Lord King of Lothbury.

Marvin Goodfriend is Professor at the Tepper School of Business at Carnegie Mellon University in Pittsburgh, USA. In addition to a long academic career, Professor Goodfriend has held various different posts at the US Federal Reserve. He left the Federal Reserve in 2005.

The Committee on Finance has previously decided that an independent and external evaluation of monetary policy will be commissioned every four years, as a complement to the Committee's own annual evaluations and open hearings with the Governor and Deputy Governors of the Riksbank.

The first evaluation was made by Professors Francesco Giavazzi and Frederic Mishkin, and covered the period 1995-2005. The second was by Professors Charles Goodhart and Jean-Charles Rochet, and covered the period 2005-2010.

Facts: How the Riksbank is examined

The Riksbank is independent of political influence...
This has been the case since 1999. There are two reasons for this: one is that monetary policy shall have a long-run perspective that creates the right conditions for a credible inflation target, and the other is that this is the principle in the Treaty on the Functioning of the European Union with regard to the system of central banks and by which Sweden is bound.

...but is carefully assessed by the General Council of the Riksbank... The Chairman and Vice Chairman have full freedom to attend the meetings of the Executive Board. The entire General Council receives presentations of all important questions discussed by the Riksbank, approximately once a month.

...by the popularly-elected members of the Riksdag Committee on Finance... Twice a year, the Executive Board has the statutory task of reporting its monetary policy to the Riksdag – in practice, this happens more often. On once of these occasions, the Riksbank provides a thorough account of the monetary policy conducted. For instance, the Riksbank compares its own forecasts with those of other analysts. You can see for yourself in the Account of monetary policy. The Committee makes its own assessment every year on the basis of this account.

...and by foreign experts. Around once every four years, the Riksdag Committee on Finance appoints a couple of prominent foreign experts to make an evaluation. This expert report, the Riksbank's own reports on monetary policy and the annual accounts form the basis for the Committee on Finance's democratic control and insight into the work of the Riksbank. All of this information is publicly available, if you are unable to find anything, please contact us.