I think we need both in a well organised financial system because as banks have a predominance of deposit liabilities with the characteristics I described earlier they are not on their own natural equity providers. This brings me to the last part of the story, namely the growth of non-bank asset management in its broadest sense as the size of bank balance sheets has tended to reduce post-crisis. It is striking that if you were familiar only with a chart of the evolution of global assets under management over the last twenty years, you should be excused for failing to spot that a global financial crisis had occurred. It follows from what I have said that this shift from banks to non-banks makes sense as we seek to achieve a clearer demarcation of the types of liability or funding contracts and the assets best suited to go with them. But it only makes sense if a few conditions are met, two in particular. First, that there is no lack of clarity about the nature of the assets held under management. Thus the label on the can is an accurate description. Take as an example the recent failure in the US of the Third Avenue Focused Credit Fund (focused on what a comedian might say). The purpose of the Fund was to invest in high yield debt. The label seems to have made that clear, and it wasn’t therefore in the form of a AAA label which obscured the reality.
With regard to inflation, one may ask “how much is too much?”. I  believe that the answer does not lie in pinning down certain numbers, but in the commitment to maintain a relatively low and stable inflation in the medium and long run. Experience has taught me that inflation is an insidious disease that should not be treated carelessly. With respect to real convergence, a question raised by many is “how fast is  fast enough?”. Again, I would not look for a certain figure; I would tackle this issue by approaching real convergence not as a race where the fastest track is also the right one, but rather as a complex process giving the steady runner (a marathoner rather than a sprinter) the opportunity to reap most of the potential benefits, while avoiding excessive risks. Much like the fable about the turtle and the rabbit, which we all know how it ends... Beyond targets and levels, and irrespective of the convergence gap an economy faces or the monetary policy regime a central bank opts for, what matters for both real convergence and price stability (as part of nominal convergence) is the consistency and the sustainability of the effort. In other words, being and staying on the right track. Thank you. 3/3  BIS central bankers' speeches