1.    Sveriges Riksbank is the world’s oldest central bank. What has remained fundamentally unchanged in central banking over more than three centuries?

There are several similarities between today’s Sveriges Riksbank and the bank founded in 1668, then called Riksens Ständers Bank (“the Bank of the Estates of the Realm”). At the time, the Swedish parliament, the Riksdag of the Estates, consisted of four estates: the nobility, the clergy, the burghers and the peasants.

One similarity is that the bank then, as now, served the public interest rather than private owners. Both the bank founded in 1668 and today’s Riksbank were established to promote economic stability in the realm. The 1668 bank was created after the collapse of the private bank Stockholms Banco, when the Riksdag sought a more reliable and publicly accountable institution. Today, the Riksbank remains a public institution with responsibility for monetary policy and the stability of the financial system.

Another similarity is the bank’s role in money and payments. The early bank handled credit, deposits and payments throughout the realm. Today, the Riksbank continues to play a central role in Sweden’s payment system and is responsible for issuing the national currency, the krona.

A third similarity is the importance of trust. In 1668, restoring confidence after a banking collapse was a key concern. The same remains true today: modern central banks depend on public trust in the value of money and the financial system.

A fourth similarity is the Riksdag’s oversight role. From the beginning, the bank was placed under the authority of the Riksdag rather than under the direct control of the king, which was unusual in Europe at the time. Today, the Riksdag still has a special constitutional relationship with the Riksbank: it appoints the General Council, which in turn appoints the Executive Board, and it evaluates the monetary policy pursued by the Riksbank.

2.    What do you see as the most important turning point in modern central banking — the Great Depression, the inflation of the 1970s, or more recent crises?

It is probably impossible to rank these episodes. Both the Great Depression and the inflation of the 1970s fundamentally reshaped the foundations of monetary policy in different ways, and recent crises may yet do so as well, even if it remains unclear how. Different monetary policy regimes emerge in response to the challenges of their time.

After the Great Depression, the role of central banks changed quite dramatically. Before the 1930s, many central banks saw their primary mission as defending the gold standard and maintaining currency stability. After the Great Depression, they began to assume much greater responsibility for the economy as a whole — including employment, growth, financial system stability, and crisis management. Many functions that today appear self-evident were developed or strengthened in this period: macroeconomic stabilisation, cooperation with the state in times of crisis, supervision of the banking system, and the use of the interest rate as the primary policy instrument.

Following the inflationary experiences of the 1970s, the pendulum gradually swung back. Central banks increasingly prioritised low and stable inflation over other objectives, and many countries granted their central banks greater independence from short-term political pressures. Central banks also placed growing emphasis on clear communication, predictability, and the anchoring of inflation expectations. This is, to a large extent, the regime we still operate within today.

Whether the past fifteen years of crises will have similarly far-reaching consequences for monetary policy remains uncertain. My assessment is that this is unlikely. Maintaining low and stable inflation, as well as macroeconomic and financial stability, are ultimately core objectives of central banking and are unlikely to change fundamentally. It may, however, be concluded over time that central banks have been assigned − or have assumed − an overly broad set of responsibilities. If so, this could lead to a gradual narrowing of mandates and objectives.

3.    Have central banks accumulated too many responsibilities compared to their original mandates?

This is a difficult question to answer, since that would tar every central bank with the same brush. You have to consider this on a case-by-case basis.

But speaking in general, the risk of mission creep – i.e. the risk that central banks start to take actions beyond their mandates – needs to be taken seriously. The risk is perhaps particularly high when new economic and political issues turn up in the public debate. This is not to say that central banks necessarily should avoid such issues. There might often be good reasons to pay attention to them. It all depends on the context. Climate change can be taken as an example here. Higher risks of extreme weather events imply, among other things, higher risks of recurrent supply disruptions and higher risks in the financial system. From this perspective, there are clear links to monetary policy and financial stability that are relevant for the Riksbank to discuss. However, the Riksbank should not interfere in the question of whether Sweden should invest in nuclear or wind power, or in the size of the reduction obligation.

It is important that central banks do not reflexively engage in these issues but carefully consider if there are aspects that are connected to their mandates and in what way.

One crucial reason why mission creep must be avoided is that it could erode the general trust in the central bank and the democratic anchoring of the central bank’s independence. Trust and support for the independence cannot be taken for granted. It must be constantly earned by the central bank by fulfilling its mandate, carrying out the tasks entrusted to it in a transparent, respectful and determined manner. 

4.    As the National Bank of the Republic of North Macedonia marks 80 years of central banking, what do you see as the most important role of central banks in maintaining trust and stability in today’s increasingly uncertain global environment?

Answer: One topic that has been much discussed recently is central bank independence, which is perhaps the most important factor to maintain trust and stability for monetary policy. In 2025, the issue of central bank independence started to be increasingly discussed internationally. The reason for delegating monetary policy to an independent central bank is that central banks that make their decisions independently find it easier to keep inflation low and stable in the long run. Although independent central banks have made a big impact around the world in recent decades, there are examples of countries where governments have exerted strong political influence over monetary policy.

But even in countries that have traditionally placed great emphasis on maintaining central bank independence, political pressure has become more common. Much of the debate over the past year has centred on the United States, where the administration has put the Federal Reserve under intense pressure to cut interest rates. How this will develop in the future is unclear, but it is evident that there is an ambition on the part of the administration to exert greater political influence over the Federal Reserve’s monetary policy decisions.

Central banks’ independence can also be limited by a negative development of government finances. A key concept in this context is fiscal dominance. In short, this means that fiscal policy, i.e. the government’s decisions on government revenue and expenditure, in practice has a decisive influence on monetary policy. It is therefore worrying that the trend in many countries’ public finances is deteriorating – a trend that has been going on for some time and which seems to be being reinforced.

In Sweden there is solid support, both legally and politically, for the Riksbank to make independent decisions on monetary policy based on the framework established by the political system. Other frameworks have contributed to Sweden having good control over its public finances. It is important that this control is retained.