Our monetary policy concept, which we adopted in 2000, defines price stability, and I quote again, as "a rise in the national consumer price index of less than 2% per annum". Let me draw your attention to three subtleties here. First, our mandate is to ensure price stability, but we do tolerate some inflation! For both the ECB and the SNB, prices should slightly increase or potentially stagnate, but not decrease over time. Rising prices may not correspond to your idea of price stability, and you may think that even low inflation should be avoided since inflation causes inefficiency. The reason why central bankers think that price stability is achieved even when there is in fact some inflation, is that the better quality of new products and the improvement of existing ones can justify non-inflationary price adjustments. A second detail is that we do not name one figure as the desirable inflation rate. Rather, we say that we think of price stability as inflation somewhere between 0 and 2%. The reason for this is that uncertainties about the extent of product innovations make it difficult to define a certain inflation rate as optimal. Moreover, given the importance of trade in our GDP, our inflation rate may react rapidly to changes in foreign prices, which should not necessarily trigger a monetary policy reaction. A target band gives us more flexibility in the implementation of monetary policy.
They were hosted at Saint Catherine monastery. Once returned, they established a convent quite here, in the heavily forested area, at the bottom of the Carpathians. The new monastery was called Sinaia, in the memory of their journey to the Sinai Peninsula. A century later, the first King of Romania, Carol I fell in love with the place and built Peles Castle, his summer residence. Following the establishment of the Peles Castle a railroad connecting the capital to the king’s new summer residence was built. Little by little, Sinaia became popular among the members of the high society: they started building summer residences as well as hotels, villas. You can visit the Peles Castle and the Sinaia monastery on Friday. And now about this seminar. The topic of this seminar is integrated supervision to ensure financial stability. It relies on several conceptual layers. First of all, to understand that the frontiers among financial activities have been blurred by financial innovation and the formation of conglomerates. Secondly, effective Regulation and Supervision involves a working together of regulators and supervisors, who oversee various financial markets. And thirdly, macro prudential concerns are increasingly on the radar screen of Regulation and Supervision. Above all one needs to understand the functioning of overall finance. The program of our seminar is quite rich.