After that there was an attempt to "bridge over" the international economic downturn that followed in the wake of the oil crisis. The cost problem was checked by devaluation. The idea was to keep demand up until international economic activity showed an upturn. Another example is the beginning of the 1980s, when activity in the economy once more came out of synch. Sweden came out of the decline faster than other European countries by means of two aggressive devaluations, but the cost was that inflation became stuck at a high level. The General Council also expressed scepticism, in its comments on the commission's report, of the statement that it would be possible to pursue an individual economic policy in the case of remaining outside EMU. With hindsight, one can perhaps conclude that this scepticism was a little exaggerated in that the steering interest rate has been both higher and lower than in the euro area in recent years and the krona has fluctuated substantially. Given that a country has systems for both fiscal policy and monetary policy that inspire confidence, there appears to be somewhat better scope for action within the framework of an economic policy aiming at macroeconomic stability than was earlier assumed. 1  Sweden and the EMU, SOU 1996:158.
-  Persons filling key roles should be expected to have the necessary skills and experience to carry out their tasks appropriately. The supervisor has a role in assessing the qualifications and integrity of these key personnel through fit and proper tests. 2  BIS Review 38/2005  -  Depending on the size and complexity of the bank, appropriate structures and control mechanisms such as strong internal audit, external audit and the oversight function of the board (directly or through supporting committees such as audit committees, risk committees, compensation committees etc) support the effective operation of a supervised bank. -  Other elements, such as the appointment of independent board members who can exercise objective judgement, are usually recognised as good practice. Basel II and corporate governance Let me turn now to the Basel II capital framework. I am asked to speak about Basel II quite frequently, but while I am often requested to talk about the mechanics and the impact of the new framework, I am seldom asked about its corporate governance aspects. This is unfortunate because, in my view, Basel II is fundamentally about better risk management anchored in sound corporate governance. With that in mind, I would like to focus now on three areas where I believe Basel II will contribute to more effective corporate governance. I will refer to these as the three C’s: controls, culture and clarity. Controls The first “C” is controls.