. inflation expectations ( left scale ) cpi inflation ( left scale ) wage growth ( right scale ) - 1 - 2 - 2 fy 90 91 92 93 94 95 96 97 98 99 00 01 - 4 - 1 fy 90 91 92 93 94 95 96 97 98 99 00 01 notes : 1. in the left - hand chart, figures are monthly averages of the uncollateralized overnight call rate. 2. in the right - hand chart, figures for inflation expectations are economists'forecasts for 6 to 10 years ahead. figures for cpi inflation are for all items excluding the effects of the consumption tax hike. figures for wage growth before the january - march quarter of 1991 are for establishments with 30 or more employees, while figures from that quarter onward are for establishments with 5 or more employees. sources : bank of japan ; consensus economics inc., " consensus forecasts " ; ministry of internal affairs and communications ; ministry of health, labour and welfare. chart 4 i. the basic thinking on monetary policy changes in the phillips curve through the deflationary period cpi ( less fresh food and energy ), y / y % chg. before the deflationary period ( cy 1983 to 1997 ) ( 1 ) deterioration in the output gap ( 2 ) decline in inflation expectations during the deflationary period ( cy 1998 to 2012 ) averages for each period output gap - 1 ● ■ + 0. 7 - 1. 0 % inflation y / y chg. + 1. 5 - 0. 3 - 2 - 6 - 5 - 4 - 3 - 2 - 1 output gap ( 2 - quarter lead, % ) note : the cpi figures exclude fresh food and energy, for which prices are volatile. they also exclude temporary factors, which consist of mobile phone charges and the effects of the consumption tax hikes, policies concerning the provision of free education, and travel subsidy programs. these phillips curves are based on statistical estimates and should be interpreted with some latitude ( the same applies to charts 6 and 12 ). sources : ministry of internal affairs and communications ; bank of japan. chart 5 i. the basic thinking on monetary policy evolution of unconventional monetary policy and quantitative and qualitative monetary easing * each policy was first introduced by evolution of unconventional monetary policy the central banks shown in parentheses. ■ apr. 1999 : introduction of the idea of the policy duration effect ( forward guidance ) ( bank of japan ) ― commitment to continue with the existing monetary policy until deflationary concern is disp

anti - gridlock function which becomes operative if a transaction lacks cover. so far, queues have not been a problem in nbo. settlement risk is therefore not considered a threat to financial stability. the fourth type of risk is operational risk. operational risk arises as a result of failure or downtime in computer systems or communication lines between systems or inadequate routines. after one of the major operators experienced a system breakdown that lasted several days in the summer of 2001, all the key operators in the settlement system have initiated measures to increase operational reliability and to have better back - up solutions in the event of any disturbances at the ordinary operations site. the problems during the summer of 2001 had no impact on financial stability, but reduced the efficiency of the norwegian payment system until the operators had restored normal operations. the operational reliability of norges bank ’ s settlement system has been very high the last year. in the period from 8 october 2001 to 5 june 2002, norges bank has not been responsible for any settlement errors, i. e. 239 days without errors. on 5 june 2002, an error that was classified as a small error by bbs gave us one error point. since 5 june, operations have run smoothly, i. e. 162 days without errors. despite these positive results, norges bank has decided to modernise the current settlement system because the existing system is complicated and tightly interwoven with other systems. this makes the settlement system vulnerable. operation and maintenance of the current system also require relatively extensive resources. following discussions with the banking industry about the division of responsibility and organisation of the norwegian clearing and settlement system, it has been decided that the current division of responsibility will remain virtually unchanged. banks will be responsible for gathering transactions and for netting and norges bank will be responsible for settlement. norges bank has decided to outsource the operational activities of settlement. we are currently preparing an invitation to tender for prospective partners. we will devote considerable attention to these issues in the future. we assume that we will have a definite plan for the site of our settlement operations by summer 2003, with implementation next autumn. international recommendations and work the committee on payment and settlement systems ( cpss ) in the bank for international settlements ( bis ) has established a separate working group on retail payment systems. in september this year, the working group submitted a report on “ policy issues for central banks in retail payments ”. 11. bis recommendations • in the work on retail payments, central banks should focus on four important