Therefore, key departments to the functioning of a modern central bank, such as monetary policy, economic research, banking supervision and regulation, had to be built from scratch. As we have come a sufficiently long way to remember this with a smile on the face, I would like to share with you two amusing stories I deem illustrative for the hardships of the beginning. One dates back to the autumn of 1990. Having been recently appointed at the helm of the National Bank of Romania, I held a press conference during which I stated that the banking system would operate on two tiers or two floors, with the central bank on the first floor and commercial banks on the second. The head of the institution’s commercial banking operations – the same person who would later manage Banca Comercială Română after its separation from the National Bank of Romania – took these words literally and immediately complained that he had just moved to the first floor of the building and warned me that he had no intention of moving again! 1/5  BIS central bankers' speeches  At around the same time, in the early days of my term in office as Governor, someone “encouraged” me with the words: “Welcome and good luck running an empty bank!”. Unfortunately, the trials and tribulations of the first post-communist year had practically depleted the country’s foreign exchange reserves in nine months’ time.
I confess that I then felt the need to go to the vault and feel with my own hands the gold bars – Romania’s last tangible reserve in those days (in December 1990, gold reserves stood at 68.7 tonnes, amounting to approximately USD 850 million) – for a boost of confidence that the rather complex economic situation might be successfully tackled. It is hard to believe that this really happened, especially now, when Romania’s international reserves amount to approximately 38 billion euros. I will now move on to less amusing memories of those times. The avatars of economic transition rendered difficult the mission of Romania’s central bank. Monetary policy, a fundamental task of the National Bank of Romania, was facing numerous difficulties and constraints, as the process of lowering inflation was often undermined by the need to pursue conflicting macroeconomic objectives or avert a full-blown banking system crisis. This was because Romania’s path towards a functional market economy was anything but smooth. Quite on the contrary, the process often shifted between step-ups and slowdowns, that is when it did not stall altogether. A major feature of the domestic economy’s reform was the priority given, at the onset of the process, to ensuring the country’s social and political stability. In this context, the preferred choice was a gradual strategy, with reforms spread over many years, so as not to spark major social tensions.