##ary path we experienced in the 1970s and ’ 80s and which contributed to the recession in the early ’ 90s, which was the worst for over sixty years. a new direction in economic policy the 1970s and ’ 80s illustrate how a period of inflation creates an atmosphere of uncertainty and instability, with a speculative climate and “ short - termism ” in economic decisions. slowly but surely, production ’ s long - term conditions deteriorate. it was partly in the light of such experiences that swedish economic policy was realigned at the turn of the 1980s. since then, the focus on price stability has gained broad support in our society, including the political parties. however, in view of the severe economic problems in the early 1990s, with inflation expectations based on our historical record and a massive budget deficit, it took time for the new direction of economic policy to acquire credibility. this has been evident, for instance, in the periods of interest and exchange rate unrest. financial market trends particularly in the longer run can be regarded as an indicator of the prevailing degree of confidence in the determination and ability to conduct an economic policy that is consistent and oriented towards stability. with the free movement of capital and the globalisation of financial markets, economic policy decision - makers need to be highly disciplined. in the light of our experience since the policy realignment at the turn of the ’ 80s, this is a fact that is widely recognised today in sweden. turning the clock back would not be feasible. experience from other countries, where the policy realignment had already been made in the early 1980s, indicates that the creation of confidence in a low inflation regime takes time and a lot of hard work. but it also shows that after a while, such a process does yield its reward in the form of low interest rates, a stable currency and ultimately a favourable economic development. the price stability target following the move to a flexible exchange rate, monetary policy in sweden is directed at a quantified inflation target. in this it resembles the situation for monetary policy in australia, canada, new zealand and the united kingdom, where inflation targets are also used. in sweden the target is formulated as being to limit the increase in the consumer price index to 2 per cent. this target is to be assessed, not in terms of isolated twelve - month change figures but in a somewhat longer, annual, perspective. as monetary policy obviously cannot control price developments exactly, the target is accompanied by a tolerance interval of ±1 percentage point. this tolerance interval also serves

with decisions explained ; targeted : made to the right people in governance and management ; consistent : one organisation, one message, one tone ; and timely : communication with no surprises. our relationships need to be built on mutual respect, ethical behaviour, and te whakatopu. we measure and report on our progress against the charter annually, to ensure that the banks and insurers we regulate have the opportunity to provide feedback on how we are living up to the charter ’ s values. our latest results show that we have continued to build on the positive gains from our survey results from previous years, but that there remains room to improve, especially with the insurance industry where our relationships are less well - established than with the banking industry. 23 capacity, capability, relationships and prioritisation as you can see, we have plenty of mahi ahead of us. to deliver on our approach, we are building our own capacity and the capability of our teams to engage with the sectors we regulate. as part of this, we are documenting best practice frameworks, processes and procedures, and ensuring our systems are up - to - date. this helps us to ensure that we are consistent in how we deliver our approach to regulation and supervision. in the spirit of te whakatopu, we are broadening and deepening our relationships, building on our relationship with the banking industry and expanding our engagement with non - bank deposit takers and insurers. we are also broadening and deepening our relationships with the wider financial sector : beyond industry groups into capital market participants and users. _ _ _ _ _ _ _ _ _ _ _ _ 23 our 2022 relationship charter survey results is available from the rbnz website : https : / / www. rbnz. govt. nz / / media / 7bc93de9d9b34e39a509153e2c7b6e88. ashx our transformation as a prudential regulator unclassified ref # x798971 v1. 2 unclassified as part of this, we are continuing to expand our presence in tamaki makaurau ( auckland ) to be closer to our regulated entities and the populations we serve. we are also integrating climate change and te ao maori into our approaches, recognising the role they play in enabling economic prosperity and wellbeing for all new zealanders. we recently released an issues paper on maori access to capital, 24 which