I have raised these issues, of course, to stress the importance of a good understanding of the relationship between the two major objectives that a central bank seeks to achieve – price stability and financial stability. Over the last year, consumer price inflation has not reached the lower limit of the inflation target range.
Admittedly, none of this is an easy task which can be completed in a short space of time. The problems have built up over many years, and the path of reform before us is therefore correspondingly long and stony. The work by Adam Smith which I quoted from at the beginning of my speech is called The Wealth of Nations.