Think of the chain of events for me to get my “dream job” – head of the Federal Reserve Bank of New York. I had to decide to leave Goldman Sachs at the end of 2005; be asked by Timothy Geithner to be head of the Markets Group in 2006 and be smart enough to take him up on his offer; Barack Obama had to win the presidential election; Tim had to be selected to be Treasury Secretary; and the Board of Directors of the Bank in collaboration with the Board of Governors in Washington, D.C., had to agree on me as Tim’s successor. If you ever thought that train of events was even remotely likely, I think you would have been considered delusional! My final piece of advice is the most important one: Don’t forget all that they have taught you here about thinking critically and speaking up. So, let me sum up. Go into the job market with enthusiasm and don’t be daunted by the inevitable rejections. That’s part of the process of getting started. Don’t feel in a rush to figure out all the details of your career. If you are true to yourself, continue to build your human capital and don’t forget everything that they have taught you here, I know that you will meet with every success. Thank you and, most importantly, good luck! 4  BIS Review 71/2010
The first criterion states that the interest rate should be set with a view to stabilising inflation at target or bringing it back to target after a deviation has occurred. The specific time horizon for stabilising inflation at target will depend on the disturbances to which the economy is exposed and their duration. The second criterion states that the interest rate path should provide a reasonable balance between the path for inflation and the path for overall capacity utilisation in the economy, i.e. that the inflation targeting regime is flexible. Flexible inflation targeting builds a bridge between the long-term objective of monetary policy, which is to provide an anchor for expectations of low and stable inflation, and the objective of stability in the economy. The third criterion states that monetary policy should be robust and should seek to mitigate the risk of a build-up of financial imbalances. The criterion is an expression of the lack of a complete understanding of how the economy functions or the shocks to which the economy may be exposed. The consideration of robustness can therefore be interpreted as a form of insurance against adverse outcomes. Norges Bank does not have independent objectives for asset price inflation or debt growth. However, by mitigating the risk of financial imbalances, we may also achieve more stable developments in inflation, output and employment over time. In the case of conflicting objectives, the choice of interest rate path will involve a trade-off between different considerations.