capital ) recognize that basel ii does not take into consideration some forms of unexpected losses, for example, higher charge - offs that occur when new products are introduced, information technology systems change, merger integrations occur, and internal control processes occasionally prove ineffective. implementation efforts in the united states the u. s. banking agencies'reaction to the results of the fourth quantitative impact study - known as qis4 - shows how seriously we are taking basel ii implementation. in a statement issued on april 29, the u. s. banking agencies indicated that the minimum regulatory capital changes resulting from qis4 were more variable across institutions and capital dropped more in the aggregate than the agencies had expected. this was the impetus for deciding to delay issuance of our next round of proposals for basel ii. these unexpected results show the continued benefit of conducting periodic quantitative impact studies. they serve as a milestone to help us calibrate the progress of the framework and the bankers as we move to basel ii. we now must determine the reasons for the unexpected results from qis4. do they reflect actual differences in risk among respondents when prior supervisory information suggested more similarity in credit quality? none of the participating banks has completed their databases and models for all of their risk areas. in some cases, this created results that would not be reliable for implementing basel ii. for example, for some portfolios, expected losses reflected only the last year or two of results. thus, the strong credit performance of recent experience was not balanced by higher losses at other points of the credit cycle. were there limits of the qis4 exercise itself? is there a possible need for adjustments to the basel framework itself? analyzing the data used in qis4 is vitally important, because ultimately the success of basel ii will depend on the quantity and quality of data that banks have to use as inputs to the framework. i am sure that those of you working on basel ii - particularly the advanced approaches - are facing the same types of issues in your own countries. for those of you who will be conducting qis5 or similar exercises, i strongly suggest that you include qualitative responses from the participants as well as quantitative data. we are finding this very useful as we review the results and have follow - on discussions with bankers. u. s. regulators expect to provide additional information on the lessons we learn from the qis4 review in the near future. the notice of proposed rulemaking for basel ii will incorporate what we learn from this exercise.

is temporary and that there is reason to expect lower inflation as early as the late spring and summer. although, as i said earlier, this assumes that those setting prices and wages do not attempt to compensate themselves for the temporary price rise. all in all, it is a question of balancing the risks of, for instance, a weaker growth in the economy, against the risk that the upturn in inflation will have contagion effects. this is what the executive board must do at its monetary policy meeting on 17 march. chart 1 und1x including and excluding energy und1x und1x excluding energy sources : statistics sweden and the riksbank