It might also have the advantage of fostering an overall assessment of financial data needs for all governmental purposes. However, there would also be some substantial disadvantages to running comprehensive financial data collection through a separate independent agency established for this purpose. A new agency would entail additional budget costs because the agency would likely need to replicate many of the activities of the regulatory agencies in order to determine what data are needed. More importantly, because it would not be involved directly in supervision or market monitoring, such an agency would be hampered in its ability to understand the types of information needed to effectively monitor systemic risks and conduct macro-prudential supervision. Data collection and analysis are not done in a vacuum; an agency’s duties will inevitably reflect the priorities, experience, and interests of the collecting entity. Even regular arms-length consultations among agencies might not be effective, because detailed appreciation of the regulatory context within which financial activities that generate data and risks is needed. The separation of data collection and regulation could also dilute accountability if supervisors did not have authority to shape the form and scope of reporting requirements by regulated entities in accordance with supervisory needs. An alternative organizational approach would be available if the Congress creates a council of financial regulators to monitor systemic risks and help coordinate responses to emerging threats, such as that contemplated in a number of legislative proposals.
Let me also remind you of the political troubles that are observed in some countries in the Middle East and North Africa. The factors I have noted are factors that have added to the uncertainty for the outlook for inflation and growth worldwide and in the euro area. Let me also point out the following. Once again, we are observing an increase in food and energy and other commodity prices. This is adding to the risk of upward pressures of inflation. At the same time, it is a dampener on growth. These are real factors that I believe have raised the uncertainty for the outlook both for inflation and for growth. Q. How do you see the inflation and growth outlook? We constantly monitor developments in the outlook for growth and inflation. Our mandate is to maintain price stability over the medium term. We always try to balance the upside and downside risks of deviating from our mandate, so with new developments we always revaluate the situation. The developments since the March projection staff exercise give me reason to believe that the near-term pressures on inflation are elevated. In the near-term, the risks are to the upside. That said, we continue to observe that longer-term inflation expectations remain well anchored. I do not think we have evidence of inflation pressures persisting beyond the near term. Over the longer term I see price stability being maintained in line with our mandate.