We have so far only presented two forecasts for the policy rate, and as I mentioned earlier, there is a fairly large measure of ”learning by doing” for all those involved before everything falls into place. Everything does not always work perfectly from the start. But as I said, the purpose is that our communication will become clear and more efficient. And I am fairly convinced that we will get there, once the new system has been established. Clarity in the way we express ourselves in speeches and press releases The Riksbank has also changed its method of signalling monetary policy in speeches and press releases. In a broad sense, signalling means that we communicate in some way what we are intending to do with the repo rate. A narrower – and perhaps more common – interpretation of signalling is that it is when representatives of the Riksbank describe in speeches and press releases how they consider the interest rate should be set at the next meeting, and perhaps slightly further ahead. Previously, the Riksbank signalled ”by degrees”. Between the monetary policy meetings the individual Executive Board members held speeches on the theme of "the current situation” or something similar. There we indicated, more or less explicitly, how we thought the interest rate should be set.
In such a scenario, the outcomes that the PRA is seeking could be delivered through less onerous governance arrangements than specified precisely by the rules, and the PRA has been willing to consider more proportionate solutions. A bank may apply for a waiver or modification in respect of a PRA rule, so long as it can demonstrate that complying with the rule would be unduly burdensome, or would not achieve the 5  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  5  purpose for which the rule was made. What the PRA has sought from a firm applying for a rule modification is that its governance arrangements allow it the means to identify conflicts of interests between the ring-fenced bank and the broader group, and that it has the ability for the former to act independently should such a conflict occur. Flexibility around ring-fenced banks’ governance was envisaged by the ICB. In its final report, the ICB stated that “the appropriate degree of independence depends upon the proportion of the banking group’s assets which are outside the ring-fenced-bank. Specifically, some degree of flexibility might be appropriate where a ring-fenced bank forms a very large part of the overall group.”5 The process of granting or refusing applications for waivers and modifications is now all but complete, and rule waivers and modifications will be published by the PRA in the Financial Services Register when the regime goes live in 2019.