same time as we conduct a policy to promote financial stability. i will discuss how this should be done towards the end of my speech. low aggregate demand since the financial crisis when sweden was hit by a collapse in the demand for swedish export products at the end of 2008, gdp fell heavily. however, it did not take long for gdp to rise again and in 2010 growth figures reached almost record levels. to a certain extent, these high growth figures were of course a natural consequence of the major fall in gdp in late 2008 and early 2009. but, in contrast to many other countries, gdp in sweden also began to exceed its pre - crisis level relatively quickly ( see figure 1 ). bis central bankers ’ speeches figure 1. gdp in sweden and abroad index, q4 2007 = 100 uk euro area usa sweden note. seasonally - adjusted data sources : statistics sweden and national sources. however, despite the relatively favourable development of gdp, it seems that unemployment has become entrenched at a high level. initially unemployment increased less than we expected given the substantial fall in gdp – it peaked at 9 per cent in early 2010 – but since then it has fallen no lower than 7. 6 per cent ( see figure 2 ). in my view, this is a level that is much higher than what can be considered a long - run sustainable unemployment rate. 1 figure 2. unemployment in sweden per cent of labour force average 1999 - 2012 unemployment note. seasonally - adjusted data source : statistics sweden. long - run sustainable unemployment rate here refers to the level of unemployment that is expected to prevail when all cyclical shocks have abated, when ongoing structural changes have had a full impact and when inflation expectations are equal to the actual rate of inflation. see for example “ the long - term development of the swedish labour market ”, monetary policy report, july 2012. see also “ correction of the riksbank ’ s estimate of the long - run sustainable employment rate ”, appendix 2 of the minutes of the monetary policy meeting, july 2012, for a discussion of the role of expectations in the assessment of the long - run sustainable unemployment rate. bis central bankers ’ speeches unemployment has also begun to increase again in recent months and our latest forecast predicts that it will increase further to reach 8. 2 per cent in the third quarter of this year. figure 3. cpif inflation in sweden annual percentage change note. the series refers to monthly data. source : statistics sweden. developments thus indicate that we

against is regulatory arbitrage camouflaged by a supposed innovative business model. another consideration is whether a new business model or adopted technology will create inconsistency and incoherence with our existing rules. it follows that as a regulator, mas will need to : first, keep abreast with technological developments by engaging closely with the industry to exchange views and garner fresh insights. second, assess and adopt our regulatory response based on careful review. for instance, mas has set up our regulatory sandbox regime to facilitate testing and experimentation of cutting edge technology or innovative business models within defined parameters and duration. certain sandbox participants benefit from caseby - case regulatory exemptions following our review. we are exploring the feasibility and scope for a more nimble and flexible regulatory approach ; one that is modular and risk - appropriate or even an activities - based regulatory approach towards certain innovative business models, as opposed to a strictly entity - based regulatory framework. we are also devoting resources in our work on “ suptech ” or supervisory technology. mas has been beefing up our surveillance and analytical capabilities, including the setting up of a dedicated unit for suptech within our data analytics group. the aim is to transform our supervisory and market surveillance work to be more digital and effective, this will also allow mas to be more effective in our supervisory engagement with each of your firms. in addition, we will be employing more advanced techniques such as network analysis, or text and voice analytics to support our investigation and enforcement actions. conduct gaps let me now cover my final remarks around conduct gaps. in an increasingly digital environment and as more singaporeans become technology savvy, financial advisers should evolve to provide more holistic wealth and risk management advice. a successful transition will require maintaining a deep level of consumer trust that representatives will act in the best interest of their clients. on the issue of trust, recent episodes of large - scale movement of representatives have cast the industry in an unfavourable light. such mass recruitment of representatives by one firm gives rise to heightened market conduct risks, with respect to aggressive sales tactics and improper switching. mas has worked closely with lia on measures to address these risks and we will be issuing a public consultation soon to promote responsible recruitment practices in the financial advisory industry. meanwhile, lia members have agreed that they, as well as their financial advisory ( fa ) subsidiaries will go ahead to adopt a number of these measures. this is a positive step. briefly, these measures include : ( a ) cap