I want to explain that we have an opportunity to revisit and improve that framework in Europe and domestically, with respect to our regulatory processes, and by enhancing our approach to supervision. The starting point for approaching regulation of the fund sector should be an acceptance that funds are different. The traditional concerns of the prudential supervisor do not apply to the funds industry.
In the long run, low and stable inflation means that both individuals and firms have a better understanding of the signals provided by prices, acting against the build up of large imbalances between aggregate supply and demand. This helps to prevent an excess of unproductive investments during boom periods, associated with favourable external factors.