Svensson: Monetary policy after the financial crisis
Deputy Governor Lars E.O. Svensson is to participate in a two-day international conference in Tokyo. The theme of the conference is monetary policy lessons from the global crisis. On Friday, Mr. Svensson will participate in a panel discussion and will hold an opening speech concerning the causes of the crisis, his views on monetary policy after the financial crisis and the difference between monetary policy and financial-stability policy.
Mr. Svensson concludes that the financial crisis was only due to monetary policy to a very minor extent. He notes that flexible inflation targeting - applied correctly, and using all available information on financial conditions that is relevant to the forecasting of inflation and resource utilisation at any horizon - is still the best way to conduct monetary policy before, during and after the financial crisis. Mr. Svensson also considers that the financial crisis has shown that monetary policy alone is not sufficient to maintain financial stability, but that there is a need for a separate financial-stability policy and appropriate instruments to ensure stability.
Read the full speech below.
