The risk that a prolonged period of high inflation may destabilize expectations and become entrenched in wage and price setting requires a resolute stance in monetary policy. It is essential that other economic actors too adopt a responsible behaviour.
It is also quite obvious that should current financial instability aggravate and threaten to lead to a deflationary situation, monetary policy would have to take this into account. While the role of monetary policy in the current circumstances should be clear, it is nevertheless wise, also in this field, to draw lessons from the recent experience.