necessary in other workplaces. and so it is a basic responsibility of ours that we comply fully with the regulations and principles regarding our duties. further, as members of a central bank with strict self - discipline and a strong sense of responsibility, we need to put the public interests before our own personal interests, and respect our organizational values. meanwhile, our organizational culture of respecting and caring for each other is a longstanding tradition that we have cultivated ever since the bank of korea was established. although the environment surrounding us is changing rapidly, we have to work to maintain and further develop this proud tradition going forward. dear fellow bok members, there are substantial concerns that the korean economy could face huge difficulties this year. however, a crisis that is foreseen is no longer a crisis. if we are not too absorbed in pessimism, and prepare for approaching difficulties with optimistic and active attitudes, we can help our korean economy to overcome any troubles it may face and to take itself one - step further to a higher level. i hope that you will fully demonstrate your strong competence and potential again this year, to show that the bank of korea is indispensable to the development of our national economy. i look forward as well to your beginning this new year with renewed vigour and determination, and i wish you all happiness and fulfillment. thank you. bis central bankers ’ speeches

mr ba¤ckstra ¶ m covers monetary policy in sweden from 1996 to 1998 opening remarks by mr urban ba¤ckstra ¶ m, governor of sveriges riksbank, the swedish central bank, before the standing committee on finance in stockholm on 18 may 1999. introduction in the period 1996a€ “ 98 the annual rates of inflation, measured with the cpi, were 0. 8, 0. 9 and 0. 4 per cent, respectively. this means that in each of these years the change in the cpi not only deviated from monetary policya€™s 2 per cent target for price stability but was also outside the lower tolerance limit of 1 per cent inflation. the riksbank has indeed made assessments that subsequently proved to be a bit off the mark. as a result we have also made decisions that, looking back when the outcome was known, could have been somewhat different. but on the whole, the result of monetary policy in this period seems to be acceptable. in my opening remarks i intend to give this appraisal more substance. one major reason why cpi inflation has been low in the past three years is that the price trend has been affected by some specific price movements that monetary policy neither can nor should aim to counter fully. if the riksbank attempts to counter such price movements, the result might be unnecessarily costly for the economy, that is, exaggerated fluctuations in economic activity as well as in the financial markets. it was against this background that the new executive board of the riksbank clarified the inflation target earlier this spring. to a large extent, the clarification tallies with how monetary period has actually been conducted in the period that the standing committee is now appraising. i therefore conclude that when inflation is measured with the cpi, deviations from the inflation target, upwards as well as downwards, in certain periods are something to which we unfortunately will have to grow accustomed. as a target variable, however, the cpi has many advantages, including being familiar and covering a large assortment of goods and services. deviations from the target may sometimes even be desirable and actually benefit real factors, such as production and employment, as well as financial market stability. this conclusion does of course presuppose that people in general expect that in the medium term inflation will be in line with the target. inflation in 1996, 1997 and 1998 i now want to look in more detail at the path of inflation in the three years 1996, 1997 and