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Macroprudential Policy Can Never Replace Monetary Policy, Says Riksbank's Ekholm

3/30/2012 4:09 AM ET

Riksbank's Deputy Governor Karolina Ekholm said that macro-prudential policy cannot take the place of well-balanced fiscal and monetary policies. But it will act as an important complement to these policy areas.

At the Swedish Bankers' Association in Stockholm on Friday, Ekholm said problems essentially relate to the fact that monetary policy and fiscal policy have not been appropriate given the economic development in a number of euro countries.

She said macro-prudential policy and clear communication contribute to financial stability. She noted that macro-prudential policy can be used as an element of the work to prevent financial crises.

Further, Ekholm said central bank holds the view that openness and transparency are important components of the effort to prevent financial crises.

by RTT Staff Writer

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