Professional and transformational leadership: Leading beyond your institution Human capital development is of course incomplete without the presence of leadership. Leadership is a force like no other. Leadership drives organisations to new levels of performance and achievement together. But leadership can also be a source of inertia. As innovation continues to draw deeper lines of interconnectivity, successful future leaders are no longer those who only steer their institution, but those who can influence and collaborate with others to drive the growth of the industry towards brighter prospects. The future of banking lies very much in the collective vision of its leaders. Much of our developments in the past have been regulatory-driven. This approach is not sustainable. Drastic change is required. Collectively, industry leaders need to be more involved in playing a pivotal role to shape the future banking ecosystem. While it is natural to strive for individual or institutional success, the industry must break away from the tendency of working in isolation, or worse, waiting for others to lead. Instead, collective responsibility is needed in areas 2/3  BIS central bankers' speeches  where common solutions are required for the betterment of the banking sector. Bank Negara Malaysia has already identified several priority areas, particularly in the fintech space, which will benefit from greater joint participation by the industry. While this is a start, it should not limit the possibility of industry leaders coming together to address other areas of shared interest. I certainly hope to see this becoming a norm in the near future.
At the same time, the strained financial situation in the public sector points to weak employment growth in local governments in the period ahead as well. Thus, employment growth is likely to be somewhat weaker during the year compared with our December forecast. As early as February, we changed somewhat our outlook for the rate of wage increases as a result of the situation in the labour market. There is reason to expect total rises in wage costs to average around 3.5 per cent in 2004 and 2005, which in terms of average collectively agreed levels leaves little room for more than about 2 per cent on average in the years ahead. The wage bargaining round appears so far to have gone relatively well, but the historical experiences of Swedish wage formation suggest that one should be cautious about assuming that we are home and dry. The parties appear to be far from agreement on a number of issues, and there are risks of conflicts arising. As long as the agreements are reached at moderate levels from an inflation perspective, longer agreement periods are preferable. This would alleviate some future uncertainty and should thereby contribute to a better economic situation. So while employment, measured by the number of hours worked, in the business sector was weaker than expected last year, GDP growth was roughly in line with the Riksbank’s expectations. This means that productivity was higher than anticipated.