households and companies to which they lend. the bank therefore contributes to ensuring that the mediation of capital in the economy functions efficiently ; it is sufficient that borrowers can convince the bank of their creditworthiness, they do not need to convince each individual saver. similarly, savers do not have to assess the creditworthiness of every borrower ; it is enough to be satisfied of the bank's solvency. the banks can also supply payment services for households and companies by using the existing financial infrastructure, such as accounts and various routines for transferring funds between financial institutions. as these functions are central to an efficient economy, it is evident that major problems can arise if financial stability is upset. this is aptly illustrated by, for instance, the crises in south east asia at the end of the 1990s and by the bank crisis that sweden and other countries suffered at the beginning of that same decade. while the target of maintaining price stability is relatively straightforward and intuitive, it is more difficult to specify the task of promoting financial stability. this task has also been formulated in slightly different ways in different central banks ’ regulations. for instance, the bank of england ’ s charter says that it is ” responsible for the overall stability of the financial system as a whole ”, while the corresponding task in the regulations for sweden ’ s riksbank has been expressed in a more indirect manner : ” to promote the efficiency and safety of the payment system ”. 4 one strategy for maintaining financial stability can briefly be described as consisting of three different parts : a clear regulatory framework, an efficient day - to - day prudential supervision and oversight and a preparedness to act strongly and quickly in a crisis. exactly what role is played by the central bank in this strategy is also something that varies from country to country. many central banks contribute in different ways to the formulation of the regulatory framework for the financial system, for instance, by giving their views on proposed bills and by participating in committees where domestic and international legislation is formulated. with regard to the day - to - day prudential supervision and oversight, one solution that is applied in sweden and other countries is that the supervision of the financial sector is delegated to a special, independent authority with the power to apply sanctions. in other countries the supervision work is done by the central bank itself. in the cases where supervision is delegated to an independent authority, the central bank usually has an oversight role that entails regularly monitoring and analysing developments in the financial sector

what was hoped for and i am not aware of any country where making the central bank more independent has been regretted. conclusion let me round off. i began by saying that the state bank of vietnam is currently in a situation similar to that of the swedish riksbank just over a decade ago. however, it is also the case that the conditions are different in certain respects. one difference is that the swedish credit and money markets had been deregulated completely during the 1980s and early 1990s. this meant, for instance, that the central government issued bonds, through public auctions and at predetermined times, and actively attempted to promote the development of a secondary market. thus, there was already a clear channel through which monetary policy could have an effect. another difference was that we in sweden had the support of a long tradition of comprehensive production of public statistics that made our work easier. these are factors that, as i understand it, do not apply to the same extent here in vietnam, at least not yet. vietnam has thus – like all countries – its own special conditions that may need to be taken into account and may make it difficult to formulate monetary policy as an exact blueprint of the system in for a detailed discussion of “ central bank transparency ”, see, for instance, chapter 1 of blinder, a. s., ( 2004 ), the quiet revolution – central banking goes modern, yale university press. another country. 8 however, i would like to say nevertheless that the principles which guide monetary policy in modern central banks, and which i have described here, are so general that they should be able to act as guiding stars for monetary policy reform work anywhere in the world. essentially it is a question of giving the central bank carefully specified – and realistic – objectives, granting it independence in its endeavours to meet the objectives and ensuring that it carries out its work in a transparent manner and is accountable for its actions. it is my conviction that reforms based on these principles will be beneficial to vietnam, too. thank you. it can be noted, for instance, that camen, u. and h. genberg, ( 2005 ), ” an inflation targeting regime for vietnam ”, paper prepared for the vercon first annual conference, hanoi, may 24, draw the conclusion that the conditions for introducing ” full fledged inflation targeting ” have not yet been fulfilled in vietnam.