Investing.com – Swedish Riksbank governor Stefan Ingves called on central banks to reassess their strategies and warned of grave flaws in macroprudential policy.
“We find ourselves in a situation where the strategies and regulatory frameworks followed by central banks in the past decades must be reassessed,” Ingves said in a speech given to the Swedish Economic Association.
The head of the Swedish monetary authority said that challenges facing central banks were not only related to experience from the recent financial crisis, but also had to do with structural changes in the financial system, such as globalization. Ingves also point to technological changes.
“These changes also affect the scope of countries and central banks to pursue an independent economic policy,” he said.
Morevover, Ingves was particularly critical of macroprudential policy, insisting that it needed a “complete rethink”.
“There are significant flaws with vague mandates, unclear processes and inefficiencies that, in the long run, threaten financial stability in Sweden,” the Riksbank governor asserted.
At 11:11AM GMT, or 7:11AM ET, USD/SEK rose 0.28% to 8.1570, EUR/SEK inched up 0.01% to 9.2613, and GBP/SEK traded down 0.39%, to 11.4860.