In addition, the conference features two keynote speeches that address some of the most important issues facing central banks: monetary-fiscal interactions and the macroeconomics of climate change. Under normal conditions, the informal discussions at these annual conferences provide a useful opportunity to increase external awareness of the monetary policy research conducted at the ECB and across the Eurosystem. Since such informal interactions cannot be reproduced in webinar format, I will take this opportunity to highlight the extraordinary research efforts of the ECB and Eurosystem staff in supporting our recent monetary policy strategy review. In particular, eighteen ECB occasional papers were released on 21 September. These papers provide not only a superb series of surveys of the state of research on a given topic but also report many substantive new research findings: I believe that these occasional papers lay important foundations for many research programmes in academia and in central banks for years to come. The research reported in these papers shaped our new monetary policy strategy. In particular, a central theme of the review was to work out the implications of the trend decline in the equilibrium real interest rate and the associated implications of the effective lower bound for the conduct of monetary policy. One basic conclusion of the review is that it is essential to build a sufficient medium-term inflation buffer (as captured by the symmetric two per cent inflation target) to create the monetary policy space required to be effective in tackling negative shocks.
I’d like to mention one other area of preparations that will affect banks directly: the recalibration exercise. In order to establish a common data set on which to base this review, the Committee has decided to begin the recalibration exercise in autumn this year. We recognise that the recalibration exercise will demand resources from both banks and supervisors. The IIF expressed clearly to us this concern. In this regard I would like to make two comments. First, we discussed this issue yesterday in our meeting and decided to publish a newsletter clarifying some elements of the proposed work that I hope will address these concerns. In this newsletter, available on the BIS website, we underline several ideas. The Committee thinks that this early recalibration, in the spring of 2006, will give banks and supervisors more time to reflect and will facilitate implementation. In order to ensure that the envisaged review is based on recent and high-quality data, the Committee will undertake a so-called fifth impact study between October and December 2005, three months earlier than previously envisaged. The calibration of the revised Framework will be discussed in spring 2006 on the basis of QIS 5 data. As we are conscious of the workload of this exercise, the Committee does not intend to set data requirements or timeframes for the parallel calculation that will be conducted in 2006. So there is no duplication of work.