And this left a more distinctive and clearly defined role for monetary policy as the primary instrument for maintaining broad balance consistently over time between aggregate demand and underlying supply. All this has become the accepted wisdom just about everywhere. Since 1992 in this country the explicit objective of monetary policy has been to achieve stability defined in terms of a target for retail price inflation. And since 1997 the Bank of England - through the Monetary Policy Committee - has been delegated responsibility for setting short-term interest rates with the consistent aim of hitting the Government's symmetrical 2½% inflation target (on a precisely defined measure of retail price inflation - RPIX). Now the reason we've been set that task is not - as some people imagine - because either we or the Government think that consistently low inflation is the be all and end all of economic life. It is because we learned from our earlier experience that consistently low inflation is a necessary (though not in itself a sufficient) condition for the sustained growth of output of the economy as a whole, for high levels of employment, and for rising living standards, which are more fundamentally the things that we are all seeking to achieve. "Stability is a necessary condition for sustainable growth" has become the universal central-banking credo. So our objective - and the reasons for it - could not be clearer. But meeting that objective is not as straightforward as it may sound.
Even though handling procedures for credit claims are sometime more cumbersome, counterparties show an increasing interest for this asset class with very low opportunity cost. The bottom line of these figures is that the increasing use of lower opportunity cost collateral shows that a growing number of counterparties are becoming more active and efficient in managing their collateral, and thus their liquidity. Finally, the recent market turmoil provided tangible evidence that the collateral framework of the Eurosystem is broad enough to ensure that counterparties do not face collateral shortages, even in difficult situations. Where do we stand today? The degree of uncertainty concerning risk – where is it?, how much?, at what price? – is declining with every forthcoming disclosure. Some asset classes have already fully recovered their risk appetite. Bank profits will be impacted, but their capacity to absorb adverse developments has also been strengthened by buoyant results over the last years. However, we are not back to normal yet, especially in the unsecured interbank term money market. We are not fully safe from a low probability but potentially high impact negative event. Before drawing some tentative lessons, let me add that there is no trade-off between liquidity provision and monetary policy, with its primary objective of maintaining price stability to which we are resolutely attached. III. Key issues  At the international and at EU level a tentative agenda is emerging around 4 axes for further examination. First: Transparency Enhance transparency for investors, markets and regulators (including improvements at the level of data reporting).