Riksbank unveils new board members

Riksbank unveils new board members
Sweden's central bank has appointed two new board members plucked from banking and academia to replace two outgoing members, one of whom was an outspoken critic of the Riksbank's commitment to the government's inflation goal.

Swedbank chief economist Cecilia Skingsley and Stockholm University economics professor Martin Flodén will join the team of six board members who set Sweden’s benchmark interest rate, or repo rate.

Skingsley as late as April said she thought the central bank should lower interest rates, citing “weak macroeconomic horizons”.

“I find it a bit difficult to understand why the board refrained from lowering the interest rate,” she said at the time in a video published on Swedbank’s website.

SEB Bank chief strategist Johan Javeus told the TT news agency that both Skingsley and Flodén were appropriate choices for the governing board, and underlined they were not dissimilar to their predecessors – Barbro Wickman-Parak and Lars E.O. Svensson.

Svensson has disagreed with bank governor Stefan Ingves over the management of the repo rate, stating in public that lowering it earlier on when the financial crisis hit Europe could have had an effect on employment rates in Sweden. The Riksbank is tasked, however, with maintaining the two-percent inflation rate set as a target by the government.

“One can assume that Flodén, with his academic background, could come to the same conclusions as Svensson,” Javeus said.

“Skingsley is closer to the market and is probably a very good communicator.”

The appointments were made by the bank’s delegate body – whose members are named by parliament to oversee affairs at the independent central bank. Its chairman, Johan Gernandt, and his deputy Sven-Erik Österberg said on Thursday they were “very pleased” with the appointments of Skingsley and Flodén.

“(They) both have a lot of experience in finance and macroeconomics, and their backgrounds complement the governing board’s other members.”

The Left Party, meanwhile, said it was time to discuss the closed-doors selection process. It is the only party, alongside the Sweden Democrats, that does not have a representative on the delegate board (Riksbankfullmäktige).

“This is Swedish version of the papal election; it has no place in a democratic society,” said the party’s financial spokeswoman Ulla Andersson in a text message to TT.

She said the candidates for the board should be questioned by parliament and relevant parliamentary committees before appointments were made.

“It is important to know how they view monetary policies, the labour market and their role. The process we have now is outdated.”

TT/The Local/at

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