I fully agree with the remark often made by Otmar Issing that there is no lasting trade-off between price stability and financial stability. 1 Even if, as he acknowledges, some short-term conflicts may occasionally arise, this can be easily accommodated by a monetary policy strategy that focuses on an appropriate medium term horizon, as the one chosen by the ECB.
I firmly believe that upgrading the security and design features of the banknotes every few years to outsmart the counterfeiters is not a long-term solution but only adds to the cost of producing the banknotes. 21. Let me elaborate what I mean.