This has been the ECB’s objective since 2003, when it was proposed by the German former chief economist, Otmar Issing. It may appear paradoxical that price stability is not zero, but there are good reasons for this. First, the “Boskin effect”, named after the US commission that showed in 1996 that the price indices used to measure inflation  BIS central bankers’ speeches  1  tended to overstate inflation, by underestimating the substitution towards products whose prices increase less quickly, and product innovation. Therefore, the inflation objective can never be too strictly observed since it is necessary to keep enough leeway to ensure that the economy doesn’t sink into deflation in the event of negative shocks. Also, low inflation facilitates structural adjustments in an economy where there are downward nominal rigidities of certain prices, in particular wages. c) In the euro area, however, like in most advanced economies, inflation remains too low, despite the historically low interest rates: the harmonised index of consumer prices (HICP) indeed returned to negative territory, standing at -0.2% in February 2016, and underlying inflation, i.e. excluding energy and food, is only 0.7%. Does this mean the Eurosystem can no longer achieve its price stability mandate, or will have to change its objective? I don’t think so. Current challenges do not call into question our mandate, but they change the way in which we fulfil it.
Niklaus Blattner: Review of the Swiss economy: end-of-year media news conference Introductory remarks by Prof Dr Niklaus Blattner, Member of the Directorate of the Swiss National Bank, at the End-of-year Media News Conference, Zurich, 7 December 2001 *  *  *  11 September 2001: a test for the global financial system For a number of years now so-called systemic risks have received increasing attention from the central banks and from banking and financial market supervisory authorities. In extreme circumstances, systemic risks may ultimately lead to a breakdown of the financial system. They have their origin either in a transmission of liquidity and solvency problems between banks and other financial service providers or in the fact that numerous market participants are simultaneously affected by the same non-diversifiable risks. Examples of such risks are sudden, widespread and massive losses in the value of financial assets (stock market crash), serious malfunctioning of major financial market infrastructures, large-scale natural disasters or terror attacks which obstruct markets and market participants in economic or technical and physical respects. The consequence may be a substantial disruption of economic activity. The damage caused to the affected economies is liable to be correspondingly large. The terror attacks of 11 September 2001 hit the central nerve of the global financial system - New York, the major trading centre for the world's leading currency and the preferred location of the international banking and financial services industry.