The framework also identifies the tool used in controlling inflation, and as is the case with most central banks, the tool used by the Bank is interest rates. Obviously in deploying the interest rate instrument, the Bank strikes a careful balance between the need to discourage excess credit growth, and the need to encourage productive investment as well as financial savings.
Supporting the European regulatory effort Let me now turn to the important role of regulation. In Europe, banks are strong today because we have applied the Basel regulatory framework to all EU banks. Indeed, recent events in other regions have shown just how important it is to have an adequate framework in place for all types of banks.