Madison’s notes describe George Mason’s position on the subject: “Though he had a mortal hatred to paper money, yet, as he could not foresee all emergencies, he was unwilling to tie the hands of the legislature”.9 Edmund Randolph was of a similar opinion: “… notwithstanding his antipathy to paper money, [he] could not agree to strike out the words, as he could not foresee all the occasions that might arise.” So the ideal is a framework that will implement what we currently believe to be the optimal monetary policy strategy and will deviate from that only if collectively we change our view about what that strategy should be. Our ignorance is too pervasive to allow the adoption of a rule for how learning should occur. So if it is sensible to delegate both policy decisions and the process of learning to institutions such as central banks, that in turn requires those institutions to have political legitimacy and an acceptance that they will not redistribute income and wealth in favour of some groups rather than others at the expense of the objective given to them.10 Where such institutions are difficult to create, the ‘external effect’ - as Stokey (2002) called it - of good monetary policy will not be captured. And if the result is a monetary policy that is sufficiently bad, it may result in a radical switch to a unit of account determined externally, an obvious example of which is dollarisation. Monetary institutions, therefore, play two different roles.
Let me emphasise that, in Bank of Albania’s vision, the monetary policy oriented toward price stability, and the supervisory and regulatory policy oriented toward financial stability contribute to the sustainable and long-term development, and are complementary to each other. This creed is fully tested by experience, both in the world and in Albania. In the long-term horizon, the Bank of Albania is confident that the investment we have made in promoting financial stability will bear its fruit with regard to sustainable development, and will increase the space for monetary policy manoeuvring. In addition, accomplishing our price stability objective would enhance the confidence in the national currency, reduce volatility and foster transparency in financial markets, thus contributing to the sustainable development of the financial system. Meanwhile, in the short-term, the coordination of monetary policy and financial stability often present challenges and compromises. In this context, setting clear priorities, using the right instruments, and communicating transparently central bank actions and objectives are key elements for the success of our work. Concluding, I would like to reiterate that I am fully confident that in the course of the day, all the issues I posed above will be elaborated in greater detail. I do believe that the contribution of the eminent panellists and active input from all participants will be an added value in this regard. I wish the best of success look forward with the greatest interest to the outcome of your deliberations. ***  Thank you for your attention! 4/4  BIS central bankers' speeches