STOCKHOLM -(Dow Jones)- Sweden should establish a new committee based at its central bank with responsibility for the country's financial stability, a Swedish research body said in a report Thursday.
The Centre for Business and Policy Studies, or SNS in Swedish, said that for fiscal and monetary policy to be credible they need financial stability.
"But where the responsibility for that financial stability on a macroeconomic lies is today unclear," SNS said.
To rectify this, "a financial committee should be established at the Riksbank but be kept separate from the monetary policy decision making process," SNS said.
One of the report's authors, Anna Larsson a researcher at Stockholm University, told an audience here that a new committee announced on Wednesday was a "step in the right direction" but only a temporary measure.
The Riksbank and Sweden's financial regulator said on Wednesday that they would set up a council to meet twice a year to evaluate risks to the economy.
In its report SNS examined the fiscal and monetary rules which Sweden has established and followed in recent years. Here Sweden is like the "best boy in class", report author Morten Ravn said.
The report said that the budget surplus target of 1% of gross domestic product and inflation target of 2% have been positive for the economy and should be left in place.
nasdaq.com
The Centre for Business and Policy Studies, or SNS in Swedish, said that for fiscal and monetary policy to be credible they need financial stability.
"But where the responsibility for that financial stability on a macroeconomic lies is today unclear," SNS said.
To rectify this, "a financial committee should be established at the Riksbank but be kept separate from the monetary policy decision making process," SNS said.
One of the report's authors, Anna Larsson a researcher at Stockholm University, told an audience here that a new committee announced on Wednesday was a "step in the right direction" but only a temporary measure.
The Riksbank and Sweden's financial regulator said on Wednesday that they would set up a council to meet twice a year to evaluate risks to the economy.
In its report SNS examined the fiscal and monetary rules which Sweden has established and followed in recent years. Here Sweden is like the "best boy in class", report author Morten Ravn said.
The report said that the budget surplus target of 1% of gross domestic product and inflation target of 2% have been positive for the economy and should be left in place.
nasdaq.com
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