It also provides credit for long maturities (with a 3-month maturity);  -  procedures guaranteeing a high level of security for all interbank transactions and large-value payments within the euro area and with other countries in the European Union, with in particular the TARGET system, which played a predominant role in the integration process of the euro money market. 2. The strategic framework also contributes to the efficiency of the single monetary policy  From the outset, there was a consensus among the designers of the Eurosystem that the Single monetary policy would require a clear strategic framework. This framework can be characterised by two main principles: a quantitative definition of price stability and a mediumterm orientation of monetary policy. The quantitative definition of price stability has been clarified after five years of experience The definition adopted by the ECB’s Governing Council in October 1998 was confirmed and clarified in May 2003 following an in-depth review of its strategic framework by the Eurosystem. In the wake of this assessment exercise, the Governing Council specified that price stability was defined as an annual increase in the HICP close to, but below, 2% over the medium term. Several remarks should complement this definition: -  by specifying that inflation should be close to 2%, the Governing Council intended first of all to confirm the symmetrical nature of its strategy by ruling out situations of deflation.
As a supervisor and regulator, I have a duty to households and businesses in the UK to preserve financial stability – to protect the UK economy from disruption. So I need to know on an ongoing basis that large CCPs on which the UK financial system relies are robustly regulated and supervised. But that should not necessarily mean I have to do the supervision of non-UK CCPs myself. Indeed if every host authority supervised every CCP that offers services to its banks and other financial institutions it would be untenable. We cannot have 21 different regulators’ hands on the steering wheel when it comes to critical cross-border infrastructure. That would hardly be a good result for financial stability - especially in a crisis, where clear and quick decision-making is critical. The solution is proportionate and informed reliance.8 Informed reliance means that, with sufficient information and a deep cooperative relationship with the home supervisor, I can defer to them to ensure that a CCP is as safe to operate in UK as those I regulate and supervise directly. Proportionate means that for cross-border CCPs that are very important to the UK financial system, I will need more information and even  7 8  BoE calculations. Principles for Financial Market Infrastructure Responsibility E on Cooperation. 5  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  5  deeper cooperation – and in the event that we are unable to secure this, I may need to resort to supervising the CCP directly.