And in this perspective, steady-handedness itself appears to be both a consequence as well as a cause of the better anchoring of inflation expectations. Not surprisingly, the anchoring of inflation expectations appears to be at the centre of a “virtuous self-reinforcing triangle”, the vertices of which are credibility, alertness and steadyhandedness.
If we look back only to 1990, the Central Bank’s regulatory responsibility extended to some 50 credit institutions. Over a dozen years, this responsibility has grown to cover almost 3000 diverse financial entities and a further 3000 collective investment schemes. The new Bill will add further to these numbers. This will pose additional challenges for the Bank and indeed for me personally.