I think this is a good thing, even though in my view repo-rate increases are already justified for other reasons and this is not a necessary justification. Unfortunately, our models are not very good at determining the significance of financial imbalances for fluctuations in economic activity. A lot of exciting development work remains to be done in this respect. The fact that the effects of financial imbalances on the macro economy may lie beyond the forecast horizons that we work with in monetary policy must not mean that we ignore them. We must monitor the development of housing prices and household indebtedness carefully and to the best of our ability analyse any indications that threatening financial imbalances are building up and take these into account in our monetary policy considerations. What characterises a well-balanced monetary policy? Ultimately, a monetary policymaker is forced to take a stance on different courses of action for monetary policy on the basis of difficult assessments of economic trends. Are there then any guidelines that can be of help? And what is it really that characterises a well-balanced monetary policy? It is normally a question of finding an appropriate balance between stabilising inflation around the inflation target and stabilising the real economy. It is difficult to translate what can be considered a well-balanced monetary policy in any given situation into precise and practical monetary policy. The intention behind stabilising inflation is relatively easy to understand, but the significance of stabilising the real economy is not so clear.
Mugur Isărescu: Policy support and the emerging “new normal”how well-positioned are Romanian firms? Opening speech by Mr Mugur Isărescu, Governor of the National Bank of Romania, at the European Investment Bank (EIB) webinar “Investment and Investment Finance in Romania”, 23 February 2022. * * * Vice President Thomsen, Distinguished audience, Ladies and gentlemen, Welcome to this year’s webinar organized by the European Investment Bank in partnership with the National Bank of Romania, titled „Policy support and the emerging “new normal”: How well-positioned are Romanian firms?”. I am delighted that so many of you could join us virtually this morning. Today, as we are shifting to a new phase of the global pandemic (and hopefully the last one), we will discuss the latest developments in investment and investment finance in Romania. We will try to provide an overview of what is needed in order to use the economic recovery as a springboard for change and transition to a more digital and greener economy. Please allow me to extend a warm welcome to Vice-President Christian Kettel Thomsen and his colleagues from the European Investment Bank, including Chief Economist Debora Revoltella and Ms. Lara Tasan Zanin, the Head of the EIB office in Bucharest. I would also like to express our appreciation for the EIB’s continuous involvement and support in engaging with stakeholders in Romania through this valuable series of events. Romania and the European Investment Bank share a long and fruitful partnership that has favored investments in important sectors of our economy.