These measures align financial market infrastructures for FX transactions with international standards and promote the development of the financial market and incorporate international standards The Central Bank has also been focused in improving the adequate functioning of the foreign exchange market, taking several steps in that direction. In terms of the “life cycle” of a transaction, we are interested in having a more competitive market, to which nondiscriminatory access to FX trading platforms is very important. Through a recent regulatory change, the Central Bank requested banks and other entities of the formal exchange market to verify that the trading platforms that they use fulfill basic conditions on risk management and access conditions. Lastly, advancing in the incorporation of the Chilean peso as an eligible currency in the Continuous Linked Settlement (CLS) international payment system remains a priority for the BCCh, so it continues to urge the necessary measures to materialize this initiative. Significant technical progress was made with CLS, and two commercial banks already showed interesting in participating. Next step is the implementation of correspondent accounts as previously mentioned. (ii)  More secure short-term funds availability  For quite a while now, access to and availability of short-term funding and the need to develop a private repo market (or lack thereof) has been a policy concern among local financial authorities. Historically, the main participants in the private sector repo market have been almost exclusively broker-dealers and their most sophisticated clients. However, repos are absent in other market segments, most notably the interbank market.
So, in short, in Sweden a situation has prevailed where subdued inflationary pressures have called for an expansionary monetary policy, while, at the same time, property prices have been surging in a fashion that in no way can be deemed as sustainable. How can, and should, a central bank in a small open economy with an inflation target deal with such a situation? The first thing a central bank can do is to engage in “open-mouth operations” and constantly remind everyone of the existence of the risks through speeches and documents. One publication that can prove particularly useful in this regard is the Financial Stability Reports, which are now published by an increasing number of central banks. By taking a systemic view of the financial system, the Financial Stability Reports investigate the collective impact stemming from the actions of individual financial institutions. By communicating these findings to market participants and the general public, the central bank can raise awareness of risks to financial stability, which might otherwise go unnoticed. BIS Review 101/2007  3  But, at times, all this may not be enough, and then the inevitable question begs to be answered – How, if at all, should a central bank let changes in asset prices influence its monetary policy? The Riksbank runs a flexible inflation target, which means that we also take the real economy into account when we set interest rates.