The changed conditions for wage formation have probably also contributed to the two most recent bargaining rounds being characterised by a high degree of cooperation between the labour market organisations. At the same time, there appears to be support among wage-earner organisations for the manufacturing industry to lead the way in collective wage agreement through what is known as the Industrial Agreement. Altogether these changes have entailed an increase in nominal wages of an  BIS Review 7/2003  1  average of 4 per cent a year over the past decade, which can be compared with an average figure of 8 per cent a year during the 1980s. Developments in wage costs over the coming years When we make our wage forecasts at the Riksbank, we base them on a total assessment of collective wage agreements, demand pressure in the labour market, productivity, profit margins, inflation expectations and taxes, to mention just a few factors. This autumn will see the beginning of wage bargaining rounds for more than 2 million employees and the outcome will have crucial importance for the development of inflation and thus monetary policy. The assessment in the December Inflation Report was that the Swedish economy would show a recovery towards the end of the year, following a relatively mild downturn in economic activity. We envisioned a still relatively strong labour market. However, employment was expected to fall slightly to begin with, before slowly showing an upturn once again.
Otherwise, the banking sector’s capacity to intermediate more effectively would be impaired for a longer time. Banks need to be determined to follow collateral execution procedures for insolvent borrowers. On the other hand, court decisions and particularly the actions of bailiff officers should be prompt and effective. I take this opportunity to appeal to the authorities to prioritize these actions. If legal procedures need to be complemented and improved further in order to enhance efficiency, the banking industry should make the necessary proposals in a prompt fashion and the public authorities should commit to considering them. Lastly, I want to elaborate on two other issues. The first relates to governance and accountability in banking operations and the second to the improvement of capacities for the identification, evaluation and management of risks. These two issues have continuously been part of our regular communication as they rest on the cornerstone of a safe and successful banking activity, public confidence on which remains unwavering. Concerning governance, last year I constantly highlighted the need for professionalism, commitment, responsibility, farsightedness and accountability to be reflected not only by you but they should also be embodied in your staff. To make this happen, policies and rules for defining strategies for the development, concrete decision-making, control of particular activities and their reporting to the institution and the public need to be continuously completed and improved. Internal control systems are the ones to determine the institution’s capacity to operate safely.