If inflation is anticipated over the period ahead, wages and prices will be set commensurately higher as workers and firms strive to protect themselves against the erosion of their purchasing power. 1  The views I am expressing today are my own and not necessarily those of my colleagues on the Federal Open Market Committee.
There are three main priority areas: –  first we need to complete the reform of the international financial system;  –  second, we have to develop a better system of macroprudential surveillance, refining the authorities’ ability to identify systemic risk and, especially, to act upon early warnings;  –  third, crucially, we need to establish a coherent set of norms, rules of conduct and formal institutions shaping coordination of national economic policies.