And the Bank of England is similarly mandated to pursue "price stability as defined by the (symmetrical) inflation target, and without prejudice to that objective to support the Government's economic policy, including its objectives for growth and employment". Now the exact words of these mandates differ - to varying degrees. What's more we all have our own procedures and processes - in terms of the composition of our decision-making bodies for example, or the form and frequency of our policy meetings, or of our arrangements for public accountability. And our approaches to fulfilling our mandates vary from one central bank to another - some of us, for example, have a more precise target, or tolerance range, for inflation, or some provide a more explicit role for monetary aggregates within the analytical framework and so on. And much is sometimes made of these various differences. One can in fact spend many happy hours debating the finer pros and cons of one formulation as against another, and that can be a productive thing to do in pointing up the issues, though I think in the end my own conclusion is that circumstances alter cases - there's no unique best buy. But I think that we need in any event to be careful that in pointing up the differences between us we don't exaggerate them. Because I have to say that in my experience - at a more fundamental level we are all trying to do the same thing.
As regards the short-term predictability of monetary policy, policy moves have been pretty well anticipated by money markets. Recent studies by academics have confirmed the predictability of the ECB at the highest level amongst major central banks. Investors have indeed become more confident in their forecasts of future short-term interest rate developments prior to ECB monetary policy announcements. Bond market indicators paint essentially the same picture. Implied bond market volatility in the euro area is currently close to its lowest level since January 1999. Communication is an ongoing challenge Financial markets evidence indeed indicates that we as a central bank have managed to be understood by market professionals. But this is only part of the picture and should give no reason for complacency. We are well aware that earning people’s trust in the credibility of the ECB remains an ongoing challenge. And we know that the familiarity of the general public with the Eurosystem and the ECB still needs to be further enhanced. One indication of the daunting size of our communication task was the issue of so-called perceived inflation rising much higher than the actual measured inflation. It has turned out to be difficult to explain people that they should not judge the general price level just by observing the prices of some individual goods. We see the dichotomy of different target groups in the fact that there was at times a heated debate about deflation risks among financial analysts while at the same time the general public was deeply concerned about inflation.