mr backstrom reviews some topical monetary policy issues in sweden speech given by mr urban backstrom, governor of the sveriges riksbank and chairman of the board of directors and president of the bank for international settlements, at the swedish bond promotion, stockholm, on 4 october 1999. * * * this year ’ s economic growth in sweden has been impressively strong. gdp growth in the first half - year, on the first half of 1998, was 3. 4 %. the number in employment has risen by approximately 100, 000 persons. as many people are returning to the labour market now that more jobs are becoming available, the reduction of unemployment has not been as marked. but total as well as registered unemployment is falling from the previously high levels. this has been accompanied by price increases that are moderate. to date this year, inflation ’ s underlying rate – measured by undix, which excludes interest expenditure, indirect taxes and subsidies – has fluctuated between 1. 0 and 1. 5 %. the picture since the summer seems to point to a continuation of favourable growth and employment, with no immediate threats to price stability. but we have to be on our guard, particularly as the economy is now in an upward phase. due to the time lag in monetary policy, the riksbank ’ s interest rate decisions have to be based on the prospects fairly far ahead. the most relevant period for our deliberations is the outlook for inflation twelve to twenty - four months ahead. looking back the current picture of the swedish economy is very different from the situation at the time of this assembly last year. the mood was then clouded by the asian crisis, russia ’ s suspension of debt payments, the problems with the hedge fund long term capital management and an international share price fall. the hedge fund problems aroused fears that banks in general would become so cautious about providing credit that this by itself would paralyse the global economy. that such a credit crunch was in fact imminent last autumn was indicated by the widening interest rate spreads to borrowers with good and less good credit ratings. last autumn ’ s financial crisis accordingly added to the negative real economic effects that were expected to come from the crisis in asia. forecasters reassessed the world economic outlook and revised their growth and inflation forecasts downwards. central banks around the world did the same and the riksbank was no exception. instrumental rates were cut in many countries. between june 1998 and spring 1999 the riksbank reduced the repo

to the same type of risk, regardless of incumbents or new players, second, proportionality – implementing regulations that are proportionate to the benefits and risk, and third, neutrality – prioritising desirable outcomes whilst remaining agnostic to different technologies, systems and approaches. earlier this year, bnm enhanced the financial technology regulatory sandbox framework guided by these principles, which introduced, among others, a simplified eligibility assessment for sandbox applications, as well as a green lane track to enable financial institutions with solid risk management capabilities to test out innovative financial solutions in a simpler and quicker way. these developments are intended to accelerate the time - to - live testing drawing from the feedback received from the market, while creating a conducive environment where responsible innovation is nurtured, new business models are given opportunities to flourish, and associated risks are managed effectively. additionally, the issuance of the licensing and regulatory framework for digital insurers and takaful operators ( ditos ) is expected to further support these efforts by paving the way for new ditos to enter the market, that are expected to offer strong and meaningful value propositions that align with the outcomes of enhancing inclusion, competition and efficiency. in particular, we envision that the ditos will challenge the status quo in the market by bringing about greater efficiency while significantly also help address protection gaps. amidst these developments, preserving trust remains the bedrock of the insurance industry. in this respect, bnm has also raised standards on the professionalism of insurance agents and introduced further enhancements to the product transparency and disclosure requirements to make it easier for consumers to access key product information for decision making. it is imperative for insurers to uphold sound business conduct, ensure professionalism of its intermediaries and most importantly, prioritise consumers'interest. unhealthy sales practices and imposition of unnecessary costs can easily erode consumer confidence. as such, fostering a strong ethical culture should be the cornerstone of every insurers'operation. liam to continue to reinvent itself to remain relevant and effective as we look ahead, life insurance companies and by association, family takaful operators, carry immense responsibility in promoting long - term financial resilience of households in malaysia. the launch of the starter pack insurance fund by liam is very commendable and a step in the right direction. the financial assistance extended to consumers is not only a befitting way to commemorate its five decades as a responsible corporate citizen, but also in line