BIS Review 10/1998  -4-  Some of the provisions of the draft legislative decree are aimed at strengthening the Bank of Italy’s independence, the essentials of which are in fact already provided for in Italian legislation.
This meant we had a high inflation rate relative to other countries. We found that about three-quarters of other countries had lower inflation. In addition, with ‘normal’ inflation already near 6%, every new adverse price shock would push us outside of the target range. This would force us to act, rather than be flexible, or would cost us credibility, ensuring a higher inflation rate.