As its mandate broadens, the likelihood that its actions will be seen as the right ones lessens. We are hardly able to cure all the ills of modern economies, let alone whole societies. So, we should keep on practicing restraint, both in the scope of the mandate we wish for, and in our communication on more general issues lying outside our direct responsibilities and outside the time frame over which we can influence the position of the economy in the business or financial cycle. Such restraint also enables us to communicate convincingly and effectively without needing to resort to strong words. At a time when even the central bank’s core mandate – monetary policy – has become quite a challenge to implement, such quality of communication is of utmost importance. As we head toward the ZLB, as we ponder or carry out unconventional monetary policy measures, and as we address the consequences of similar moves made by our colleagues, we must be sure that our words are read carefully and taken seriously. In such a world, we must also carefully scrutinize whether we are overestimating our ability to forecast the fundamentally uncertain economic system and identify its crucial elements, and  BIS central bankers’ speeches  1  consequently whether we are overcommitting ourselves in our efforts to reduce the uncertainty felt by economic agents.
The Governing Council does not react mechanistically to a single variable - whether this be a forecast, the exchange rate, unit labour costs or fiscal indicators - but rather takes into account the complete picture offered by all available and meaningful leading indicators of future inflation. In this context, the Governing Council analyses the economic reasons behind the projected risks to price stability. The appropriate monetary policy response to a threat to price stability will depend on the nature of the threat. The Governing Council can only understand the nature of the risk if it is presented with a full set of data. From these, it can attempt to identify the nature of the disturbance to price stability. Having identified the threat, an appropriate policy response can be selected and implemented. Internal forecasts of economic activity and inflation in the euro area can also contribute to the success of an appropriately forward-looking monetary policy. However, the Eurosystem should not be judged on, or held accountable for, the accuracy of its internal forecasts. Thus, publication of the forecasts cannot contribute to accountability. Rather, its performance in maintaining price stability in the medium term should be used by the public to judge the success of the Eurosystem. Allow me to say a few words on certain proposals made in the recent public debate, which may be deemed to suggest that the focus of monetary policy should be shifted towards objectives other than price stability.