8  BIS central bankers’ speeches  The Icelandic authorities have a strategy in place to lift the capital controls gradually, as conditions permit, without unduly undermining exchange rate and financial stability. The strategy is currently under review. It is clear that the process will be significantly affected by how the króna problem associated the winding up of the old banks is dealt with, as an amicable solution could greatly expedite the removal of the controls. But the basic thinking will remain the same. The first element is to secure the framework conditions for lifting the controls, such as at least balanced public sector finances, an underlying current account surplus, and adequate FX reserves. All of this is either in place or well on its way. The second element is to put in place the economic policy frameworks and prudential rules that will make it possible for Iceland to deal with the risks associated with free and volatile capital movements. That is also underway. The third element is to reduce the overhang of liquid offshore krónur to a safer level, either through release at a discount or by tying the offshore krónur up in longer maturities and real investments. That is underway as well, although some are of the view that the process is too slow. The fourth element is to open market access and, through other means, generate longer-term inflows to replace the capital that wants to leave. History shows that those who jump early on such a bandwagon have a lot to gain.
Literacy and numeracy are prime examples here, where there is universal coverage during the early school years. This makes perfect sense in building the educational basics. Take mathematics. This is compulsory for every student in the UK (and in many other countries), at least up to age 16. The bottom of the educational pyramid is, in effect, population-wide. After that point, the educational pyramid narrows quite sharply (Figure 1). Only 12% of the population studies maths between the ages of 16-18. And less than 1% study it beyond age 18, at college or university. This degree of specialisation also makes sense. Not everyone wants, or needs, to be Stephen Hawking. 50 51 52  Patel and Gibbon (2017). ING-Economics Network Survey of the Public’s Understanding of Economics (2017). Report prepared for the National Council on Economic Education by Harris Interactive (2005). 13  All speeches are available online at www.bankofengland.co.uk/speeches  13  How well the UK educational systems provide students with even the essentials of numeracy is another 53  matter. The statistics here tell an ugly story, with 17 million adults in the UK having numeracy skills no  better than those expected of a primary school child. illiteracy, where the figures are equally ugly. 55  54  And it is a short hop from innumeracy to financial  Nonetheless, in coverage at least, maths education has a  broad base, as befits a subject needed by almost everyone almost every day of their lives.