Therefore, continued close monitoring of further incoming information is warranted. In the current economic environment, medium-term upward pressures on inflation are not likely to materialise. Annual consumer price inflation, as measured by the Harmonised Index of Consumer  2  BIS Review 6/2002  Prices (HICP), has declined steadily over the past few months and stood at close to 2% in December 2001.
Supervisory approach In addition to strengthening the regulation of the largest, most complex financial institutions, we have also transformed our supervision of these firms. Our work is now more forward looking and multidisciplinary, drawing on a wide range of staff expertise.