Such gambles for resurrection can explain the ruin of bankers as well as gamblers, including most recently Lehman Brothers and Bear Stearns. These shifts in risk preferences are not peculiar to humans. They are also observed in birds, insects and mammals when faced with a losing streak. 14 Birds foraging in mid-winter have been found to take a calculated gamble by pursuing high-risk, high-return strategies, much like the down-at-heel gambler or world-weary CEO. Although Lehman CEO Dick Fuld was  11  For example, Ainslie and Haslam (1992), Ainslie (1974). 12  For example, Madden et al (1997), Bickel et al (1999), Petry (2001), Vuchinich and Simpson (1998). 13  For example Kahneman and Tversky (1979). 14  For example, Watson and Platt (2010), Schultz et al (2010). 4  BIS Review 114/2010  nick-named the gorilla, his behaviour during a losing streak was closer to that of a ravenous robin. Self-improving cycles If preferences evolve over time, this gives rise to the possibility of self-reinforcing patterns of behaviour. Such evolutionary trends have been extensively studied by sociologists, psychologists and even some economists. These studies confirm the old aphorism: virtue is its own reward. Specifically, patience is capable of setting in train a cycle of self-improving behaviour in individuals, economic and social systems. Take happiness. Studies have shown that happy people save more and spend less. 15 Happy people also take longer to make decisions and expect a longer life. In short, they are patient. These patterns of behaviour are connected and reinforcing.

Stefan Ingves: The relationship between the Swedish Riksbank and the Riksdag Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank, at the Sveriges Riksdag (Swedish parliament), Stockholm, 8 June 2007. *  *  *  Independence and opportunities for evaluation and accountability Let me begin by thanking you for the invitation to today’s conference. Of course it is both an honour and an inspiration to have the opportunity to discuss in such knowledgeable company the Riksbank’s relationship to the Riksdag (the Swedish parliament) and what this means for monetary policy. In recent decades many central banks have become increasingly independent in relation to the political system. This also applies to the Riksbank. At the same time, these institutions, which have often been fairly closed and secretive, have become more open and clear with regard to their objectives, motives and means. Many central banks now conduct monetary policy with more or less explicit price stability targets and the Riksbank was one of the first to introduce this type of quantified target for inflation at the beginning of the 1990s. Both our price stability objective and our independence have been written in the law since 1999. This contributes to strengthening the credibility of monetary policy. The fact that increased independence has gone hand in hand with greater openness and clarity – what is usually called transparency in central bank language – is not particularly strange. For an independent authority to gain general acceptance and legitimacy, there must be good opportunities for evaluation and accountability.