moreover, we also have the task " without neglecting the price stability objective, of supporting the objectives for general economic policy with the aim of attaining sustainable growth and a high level of employment. " this is expressed in the proposal for the sveriges riksbank act from 1999. however, even more importantly, there is no opposition between good growth and price stability, quite the reverse. if we look at developments during the 1990s, growth since 1992 has shown an average rate of 3 per cent a year, despite the fact that inflation was under the target level for several years. at the same time, unemployment has fallen from 9 per cent to approximately 4 per cent. this can be compared with the 1970s and 1980s, when inflation was at around 8 per cent and growth an average of 2 per cent. price stability and the importance of achieving it are also well established among the general public in sweden. this is important, as understanding and acceptance of monetary policy is important for inflation expectations and thereby for behaviour on the labour and goods markets. it is you particularly those of you with your own businesses - who set the prices and who must be able to trust that it will turn out as we say ; that inflation will not rise above or fall below the target of 2 per cent for a longer period. this is also the reason why we members of the executive board often travel around holding speeches. communication with the swedish public and the operators on the various markets is important for monetary policy. as monetary policy operates impact with a certain time lag, the instrumental rate is adjusted so that the total assessment of future inflation, taking into account the risk scenarios, 1 to 2 years ahead is in line with the target. interest rate decisions are based on forecasts of future prices. there will be deviations from these forecasts, even if they are well founded, partly because the economy is hit by unforeseen shocks from time to time. if fruit - growers'crops are attacked by insects, the price of apples will rise, if the dams are not filled with water, electricity prices may rise, and if cows in europe suffer various diseases, the price of meat and certain other foodstuffs rises. if the riksbank tried to make corrections for this type of temporary price disturbance, it would probably lead to large swings in monetary policy and unnecessary fluctuations in demand. it would therefore be wrong to give the impression that inflation will always lie at 2 per cent. on the other hand, it is important

##bs needed to be abjured and a multilayered regulatory and supervisory approach be adopted keeping in view the heterogeneity of the sector. accordingly, it was decided that banks with deposits less than rs. 1 billion ( equivalent to us $ 20 million ), and whose branches are limited to a small area i. e. tier - i banks which more closely epitomized the cooperative spirit, be placed under simplified prudential regulation for some time in order to enable them to gradually gain in strength so that over a period of 3 years they could be brought at par with all other banks for the purposes of regulation. accordingly, the tier - i banks have been placed under the 180 - day delinquency norm while tier ii banks are under the 90 - day norm as applicable to commercial banks. the tier - i banks are, however, required to make adequate provisions in the intervening period to enable them to migrate to the 90 - day norm in future. further, lower provisioning requirements were stipulated for tier - i compared to tier - ii banks which is also intended to provide a measure of relief to the small ucbs, as lower provisioning would translate into higher profits that could, in turn, be used, during the transition period, to shore up the capital base of the banks. b ) consultative approach to supervision – tafcub in order to address the problem of dual control, reserve bank in 2001 - 2002, suggested that a new apex supervisory body be constituted for the ucb sector, comprising representatives of central / state governments, rbi and experts from the field. however, since it did not materialize, reserve bank proposed the amendment of banking regulation act for providing powers to rbi over the ucbs similar to those that are available in respect of commercial banks. when even the 2nd suggestion did not materialise, the reserve bank in the vision document for ucbs proposed the adoption of a coordinated approach to deciding the future set up of weak and sick banks in each state. to this end, memorandum of understanding ( mou ) was signed between rbi and respective state governments and central government, in the case of multi - state urban cooperative banks, to achieve greater convergence of approach of the two agencies tasked with the regulation and supervision of ucbs. as part of the mou, it was decided to set up of state level task force for urban co - operative banks ( tafcubs ) comprising representatives of rbi, state government and national and state level federation / association