With inflation targeting as our framework, we shall keep sharpening our forecasting capability through further enhancements of our inflation forecasting models and understanding better the transmission mechanism for monetary policy in a world marked by globalization and financial innovation . For the second pillar, our thrust is proactive regulation and effective supervision of banks as well as other supervised and regulated industries.
* * * There are two questions on the future of European regulation that we have to answer. First, will regulation continue to be shaped by global standards? Second, how “European” must regulation in Europe be? Regarding the first question, I am still a firm supporter of global regulation. The financial crisis of 2008 showed us the interconnections of the global banking system.