Trade unions in Sweden urged the central bank to change the inflation target and to improve the transparency and credibility of monetary policy. According to them, the authorities must change the target level from growth in growth in consumer prices of 2%, so that it does not include changes in prices of mortgages. The organization, which reviews the monetary policy in the country between 2010 and 2015, also urges the Bank to monitor more carefully unemployment when setting interest rates.
Riksbank should stabilize inflation around the target level of unemployment around a sustainable level in the long run, according to the trade union. They reject the idea of parliament also be included in determining the target level of inflation. This proposal came in January and included a recommendation MPs to assess the target level in 10 years. Both Swedish and foreign institutions, including the European Central Bank (ECB) and Harvard University were asked to comment on such an idea.
According to the unions democratic control of the central bank must be strengthened. According to them, monetary policy was not sufficiently an expansion in 2012 and 2013, when the Bank maintained high interest rates despite concerns about rising private liabilities.
“As trying to control too many aspects of the economy, bank risks shift too much of the focus away from the target inflation. Maintaining target level is important when deciding wage increases in collective bargaining”, said the trade union.