Current developments pose one of the greatest stress tests to the globalization that in the last 4 decades through trade, financial and technological integration, brought many benefits, including marked decline in global inflation. The costs of de-globalized world can be severe - lower efficiency, higher costs and stronger and more persistent inflationary effects. Against this background, central banks need to be more humble. They cannot prevent the first-round effects of many of these shocks, but containing second round effects and anchoring inflation expectations has to be their focal point. This context prompted central banks to embark on the most synchronized and rapid monetary tightening in the last 50 years3. As interest rates hikes are taking hold, with easing supply pressures and stabilizing commodities prices, forecasts indicate that inflation will soften this year, both in advanced and developing economies. And indeed we already see signs of slowdown, but it is too early to claim victory over inflation. Core inflation in many countries remains persistent, with tight labor markets keeping pressures on wages. Nominal wage growth in the region last year was the highest following the GFCat 8.6% notably exceeding productivity gains (2.3%) thus contributing to rise in core inflation, which reached 7.4%. If this wide wage-productivity gap persists it can slow down inflation stabilization process and require longer ad stronger monetary policy reaction.
As we are lagging behind advanced Europe in terms of income and productivity, sustaining banks' financing can contribute in narrowing those gaps. At the same time, climate change and technological innovation continue to accelerate, pressing on our societies to transform towards greener and digital future. Banks can have a crucial role in financing the twin transition. To sum up, as policy makers we do face a difficult conundrum. After long time of economic moderation, all of the sudden we have to deal with major global shocks that impose tectonic shifts in the economic order, modify conventional macroeconomic paradigms, and accentuate the tradeoffs in policymaking. In this current context, it is crucial to preserve stability- stability of prices, as our primary objective and contribute to stability of the financial system. We all recall how profound consequences and scars instability causes, which is why we have to remain determined, focused and clear. It is the only way to preserve public trust, and as Brunnermeier said "the public is the ultimate source of central banks power and independence". Thank you and looking forward to the insightful debate! 1 Cited from "Monetary Policy in a High Inflation environment: Commitment and Clarity  ", Lecture by Christine Lagarde, November 2022. 2 Geopolitical risk dashboard, Black Rock, December 6, 2022 3 "Front-loading" monetary tightening: pros and cons", BIS Bulletin 63, December 2022. 4 Three have increased the rate (Slovakia, Bulgaria and Czech Republic) while other  four introduced the buffer for the first time (Croatia, Romania, Hungary and North Macedonia).