prepared to manage these risks. such plans should address any shortfalls ( policy, procedures, implementation or execution ) related to how effectively existing compliance risks have been managed, as well as the need for any additional policies or procedures do deal with new compliance risks identified as a result of the annual compliance risk assessment 9. this risk assessment, together with the subsequent introduction of improvements to the control framework, form an essential step in the ongoing process to ensure adequate control of the risks banks are faced with. aside from the responsibilities of the board of directors and senior management, the paper also mentions principles concerning the status and responsibilities of the compliance function. it is essential that the compliance function has a formal status within a bank. this in order to give the compliance function the appropriate standing, authority, and independence 10. the responsibilities of the compliance function should be to assist senior management in managing effectively the compliance risks faced by the bank. specifically this means that the compliance function should : • advise senior management ; • provide guidance and education to employees on compliance issues ; • identify, measure and assess compliance risks ; and • monitor and test compliance and report the findings through the reporting line in accordance with the bank ’ s internal risk management procedures. once more, i would like to stress the importance of timely identification, measurement and assessment of compliance risks. citing the compliance function paper “ the compliance function should, on a pro - active basis, identify, document and assess the compliance risks associated with the bank ’ s business activities, including the development of new products and business practices, the proposed establishment of new types of business or customer relationship, or material changed in the nature of such relationships ”. the paper continues by stating that the compliance function should consider ways to measure compliance risk ( e. g. by using performance indicators ) and use such measurements to enhance compliance risk assessment. it should assess the appropriateness of the bank ’ s compliance procedures and guidelines, promptly follow up any identified deficiencies and formulate proposals for amendments 11. institutions are expected to tailor their control measures to the risk classification of both their clients, and their products and to implement specific control measures for the nature and severity of the compliance risks posed by each category. therefore, the question that each one of you will need to answer for his or her organisation is : “ how can i be sure that my organisation is compliant? ” the abn amro case 12 recently, the importance of an adequate compliance function was illustrated by events that took place within abn amro,

to russian gas supplies and european demand for gas both this winter and in the winter of 2023 - 24. the profound influence of energy prices means that the central bank has difficulty controlling current inflation. wage growth along with the increase in the minimum wage also pose an inflationary risk. one - off wage hikes are logical in the face of high inflation, but automatic wage indexation will make it all the more difficult to bring inflation down. finally, prolonged expansionary fiscal policy can boost inflation further. efforts to curb inflation are helped when fiscal policy works in the same direction as monetary policy. economic growth in the third quarter of this year was - 0. 2 % in the netherlands and + 0. 2 % in the euro area ( quarter - on - quarter ). dnb will issue new projections in december. it is quite possible that we will also experience economic contraction in the coming quarters. some cooling off of the economy is needed to reduce inflationary pressures. however, it is far from certain that a mild recession will be enough to curb high inflation. what is the ecb doing about this? the ecb is taking unprecedented measures to restore price stability. the ecb embarked on the course of normalisation in december 2021. at the time, inflation was already above target but was still expected to fall below 2 % again in the medium term. the war in ukraine and broadening inflationary pressures prompted the ecb to accelerate monetary policy normalisation. net asset purchases have since ceased ( the pandemic emergency purchase programme ( pepp ) in march and the asset purchase programme ( app ) in july ) and the ecb has raised policy rates three times. the two most recent rate hikes ( of 0. 75 percentage points ) were the ecb's largest rate hikes ever. monetary policy is expected to tighten even more in the coming months, thus raising interest rates further beyond neutral levels. © dnb current monetary policy is geared towards curbing demand, thus keeping inflation expectations anchored. the ecb is using higher interest rates to bring demand in line with more limited supply, thus creating a balance that will contribute to price stability. the rapid pace at which interest rates have been raised is linked to the pace at which inflation has increased and underlines the ecb's commitment to price stability in line with its mandate. the ecb will continue to tighten its policy until the medium - term outlook for inflation – a broader concept than just model projections – returns to target. monetary