Reducing the debt overhang and obtaining sustainable levels of leverage for all  10  See, e.g. Levine (1997). 11  Clark and Dilnot (2002). 12  Temin (1997). BIS Review 111/2010  5  actors in the economy is the only option for achieving the goal of the Toronto summit declaration in June: to “create strong, sustainable and balanced global growth”.
While the ongoing economic expansion provides confidence that inflation will gradually head to levels in line with our inflation aim, it has yet to translate sufficiently into stronger inflation dynamics. Measures of underlying inflation have ticked up slightly in recent months but, overall, remain at subdued levels.