Thus I am particularly pleased to have the opportunity to convey my ideas on this subject here at the BIS in Basle. Problems with definitions Let me start by defining what I mean with monetary and financial stability. Monetary stability is a synonym for price stability.
Price stability refers to a stable price level or a low level of inflation and not to stable individual prices. There is no doubt that changing relative prices play a crucial and beneficial part in economic adjustment and decision making by individual actors be it companies or households.