utilisation around a normal level. the question then is which measures of the two target variables, inflation and resource utilisation, we should use. although the inflation target is expressed in terms of the cpi, i believe that the most appropriate operational measure of inflation is the cpif. i also believe that the most appropriate measure of resource utilisation is the unemployment gap ; that is the gap between the actual rate of unemployment and the sustainable rate of unemployment. let me explain why i think that the existing framework for monetary policy could be improved with these specifications. the cpif is the most appropriate operational measure of inflation the riksbank ’ s inflation target is expressed in terms of the rate of change in the consumer price index, the cpi. this has advantages as it is measured often and is seldom revised. it also means something to consumers as it corresponds to the price of an average basket of consumer goods. the cpi is also the measure of inflation that is most well - known to the general public. however, the cpi also has a well - known disadvantage, which in my opinion makes it less appropriate as a direct, operational target for monetary policy. this disadvantage is that the cpi is directly affected by interest rate changes through their impact on housing costs. this short - term effect also has the reverse sign to the medium - term effect. this means that the riksbank ’ s own repo rate increases contribute to an increase in cpi inflation in the short term but reduce it in the slightly longer term. the major interest rate changes during the crisis have led to considerable fluctuations in the cpi. i believe on the whole that it is better to consistently use the cpif as an operational target for monetary policy and disregard the direct effects of interest rate changes on the cpi when assessing whether monetary policy is well - balanced. by stabilising the cpif around 2 per cent, the cpi will be stabilised around the target in the slightly longer term. it would then be important to consistently use the cpif to rank various monetary policy alternatives and not change back and forth between the cpif and the cpi. if we sometimes refer to the cpif and sometimes to the cpi, monetary policy will become unclear. the unemployment gap is the most appropriate measure of resource utilisation there are many ways of measuring resource utilisation, for example the output gap, the hours - worked gap, the employment gap, capacity utilisation or the riksbank ’ s ru indicator. as there are so

muhammad al - jasser : compliance and combating money laundering speech by his excellency dr muhammad al - jasser, governor of the saudi arabian monetary agency ( sama ), at the symposium on compliance and anti - money laundering, institute of banking, riyadh, 23 – 24 march 2010. * * * in the name of allah the merciful, and blessings and peace be upon his prophet and messenger, dear audience, i am pleased to welcome you to this symposium, which is organized by the institute of banking ( iob ) and deals with two important and interrelated issues : compliance and combating money laundering. decision - makers and legislators have paid increasing attention to the issue of compliance with regulations, criteria and guidelines because of its importance to financial institutions in achieving better performance, avoiding risks and enhancing their success. at the same time, compliance maintains the reputation and credibility of financial institutions and protects them against regulatory sanctions. it also protects the interests of shareholders and depositors. compliance is a comprehensive and multifaceted responsibility, and achieving compliance is a duty that all employees in any financial institution have to undertake, each according to entrusted powers and tasks. recognizing the importance of compliance, the basel committee on banking supervision, with the participation of the saudi arabian monetary agency ( sama ), approved and issued the paper pertaining to principles of compliance and its function at banks, in april 2005. the paper was designed in the form of fundamental principles of compliance with the regulations, covering a number of areas, the most important of which are the responsibilities of the board of directors and senior management, controls on the independence of compliance function at banks, support of compliance department and its work program, and the relationship of compliance department with internal audit department. in may 2005, sama directed banks operating in the kingdom to adopt the principles stated in this paper and incorporate them with the procedures and programs regarding risks of noncompliance that have already been applied and developed by banks under the instructions of sama. dear audience, you are also dealing in this symposium with an important topic, which is combating money laundering. as you know, money laundering is one of the most serious crimes at the security, economic and moral levels. this heinous crime is carried out by organized networks practicing crime as a profession and having a high potential for coordination, planning and deployment throughout the world. these networks take advantage of the globalization of capital markets and technological developments in the banking industry. because of the negative impacts of