influence development in an individual sector. monetary policy can only focus on stabilising average resource utilisation and average inflation. this division is therefore not itself normally an argument for either a more expansionary or a more contractionary monetary policy. however, in the current situation, with a very low level of resource utilisation and a very weak export industry, one can claim that irrespective of how sensitive to interest rates the export industry is it should benefit from a weak krona and suffer from a strong krona. as a more expansionary monetary policy would entail a weaker krona one can claim that the division is in this situation an argument for pursuing a more expansionary monetary policy. this argument is strengthened by the fact that there do not appear to be any signs of overheating in the service sector in the form of a shortage of labour and excessive wage increases. conclusion : an extended repo rate path better stabilises inflation and resource utilisation it is possible to reduce the monetary policy decision to the following questions : when should we begin to increase the repo rate from its current level of 0. 25 per cent – in july, september or december of 2010? which of these alternatives stabilises inflation and resource utilisation best? an extended repo - rate path with a repo rate of 0. 25 per cent to december 2010 stabilises both inflation and resource utilisation better than the repo - rate path in the main scenario. it poses no problems to financial stability. there is therefore a very strong argument for an extended repo - rate path. in my view there are no strong counterarguments. in fact, i cannot really see any valid counterarguments at all. references bill 1997 / 98 : 40, riksbankens stallning. finansinspektionen ( 2010 ), “ den svenska bolanemarknaden och bankernas kreditgivning, ” www. fi. se. kohn, donald l. ( 2006 ), “ monetary policy and asset prices ”, speech held on 16 march 2006, www. federalreserve. gov. kohn ( 2006, 2008 ). questions regarding the significance of asset prices for monetary policy and of the monetary policy conclusions to be drawn from the financial crisis are discussed further in svensson ( 2010a, b ). see also kohn ( 2009 ). kohn, donald l. ( 2008 ), “

xolile p guma : south africa ’ s financial regulatory environment introductory remarks by dr xolile p guma, senior deputy governor of the south african reserve bank, at the launch of the september 2010 financial stability review, pretoria, 7 october 2010. * * * members of the press, guests and colleagues on behalf of the south african reserve bank, i would like to welcome you to the release of the september 2010 edition of the financial stability review. the bank has been publishing its financial stability review on a bi - annual basis since 2004, and this is the fourteenth publication of its kind. the financial stability review aims to identify and analyse potential risks to financial system stability, communicate such assessments and stimulate debate on pertinent issues. the bank recognises that it is not the sole custodian of financial system stability, but believes that it can contribute significantly towards a larger effort to achieve stability involving the government, other regulators, self - regulatory agencies and financial market participants. as a result of the recent global financial and economic crisis there have been considerable developments that have influenced, and quite radically changed, the theoretical thinking about financial stability and its integration with the other tasks of central banks. the extraordinary measures taken to resolve the most impaired financial systems have changed the thinking about a central bank ’ s role in financial crisis management. the very high fiscal cost of resolving the crisis and stimulating growth when it led to a global slowdown has also caused politicians to be more involved with the inevitable process of regulatory reform that has followed. several of the most affected jurisdictions have announced substantial changes to their financial regulatory policy processes and regulatory structures, and the manner in which these are integrated with monetary and macroeconomic policies. not only have more powers been given to some central banks to monitor and coordinate financial stability, but governments in some jurisdictions have chosen to oversee the process of resolving “ too big to fail ” financial institutions in future crises. common features of most of the thinking reflected in recent discussion forums, literature and structural changes are an increased emphasis on the formulation of macroprudential policy and tools, and a recommendation for the creation of an independent policy decision - making structure to help consider financial stability issues and integrate any necessary policy decisions with monetary policy. crucial to the approach to be developed by the bank is the concept of macroprudential policy. there have been many different attempts to define this concept and the bank for international settlements recently referred to “ an orientation or perspective of regulatory and supervisory arrangements that is systemic rather than