So I invite you all to rise and join me in the traditional toast of good health and prosperity to “The Lord Mayor and the Lady Mayoress”, Michael and Barbara Bear. 4  BIS central bankers’ speeches
This success has been achieved through ambitious professional and theoretical work which is one of the Bank’s main focuses. We became aware that other central banks following the same kind of policy had noted and commented on how carefully Iceland had prepared for the introduction of inflation targeting. It is aimed to strengthen the Central Bank’s research and theoretical work still further, and it is worth pointing out that the new legislation specifically states that it should undertake economic research relating to its tasks. Inflation targeting establishes itself Inflation targeting policies have established themselves in recent years, with a correspondingly large reduction in the number of countries which apply policies based on fixed but adjustable exchange rates, or exchange rates within a fluctuation range. The reason is not least that it proved increasingly difficult to adhere to a fixed exchange rate policy in a world of deregulated capital movements. It could be said that prevailing opinion identified only two possible exchange rate options: a floating exchange rate or a completely fixed one, for example through membership of a currency union, unilateral adoption of some other currency or establishment of a currency board. The new policy has produced good results and is applied in countries including Sweden, Norway, the UK, Australia and New Zealand, along with several countries in Eastern Europe, Latin America, Asia and Africa. It can also be argued that the European Central Bank partly follows the same kind of policy.