In this regard, I urge the industry to take advantage of the knowledge and experience of the panel of experts assembled here at this conference, to better understand and prepare for the implications of the review of the FATF 40+9 Recommendations, and the expectations on financial institutions and boards of directors moving forward. For Bank Negara Malaysia, the enhancement to the nation’s infrastructure to combat financial crimes will remain as one of our key priorities. In this regard, our role as Malaysia’s primary financial regulator will continue to focus three broad areas. The first is to deter and prevent criminals from abusing the financial system to be the conduit for illegal activities by ensuring the continued effectiveness of Malaysia’s legal and other relevant infrastructure, systems and processes in combating financial crimes. Secondly, is to ensure all financial institutions continue to strengthen their defences against such threats and risks via our regulatory policies as well as risk-based supervisory and surveillance activities; and thirdly, to strengthen collaboration between the financial industry with other domestic and international stakeholders in AML/CFT initiatives to protect the integrity and stability of our financial system, including implementing capacity building programmes, such as this Conference.
Wage costs are expected to increase this year by just over 4.5 per cent, which is higher than the Swedish economy can manage in a longer perspective. If the social partners do not succeed in accommodating the Municipal Workers’ Union’s wage demands, there is a risk of increased inflation. Another challenge for wage formation is the government’s employment target, which entails 80 per cent of the working population having a job. Achieving this requires reforms to increase the labour supply. Moderate wage demands could hasten the adaptation to the higher rate of employment. The explanation for this is that in a small, open economy like Sweden, the profit share of the value added is determined by international conditions and the prevailing production technology. In the short term, the labour market situation and negotiating strength can affect the relative profit shares and wage shares in the economy, but in the long term a high rate of wage increase will only lead to lower employment and production without affecting real wages and profit shares. More moderate wage demands, on the other hand, together with measures to stimulate the labour supply, will lead to higher 2 employment without a long-term decline in real wages. Conclusions Finally, as I mentioned at the beginning, monetary policy cannot directly affect production’s potential, long-term growth rate. The task of monetary policy is to stabilise the economy by changing the instrumental rate if inflation deviates from the 2 per cent target one to two years ahead.