Properly designed and implemented, such an overshoot can offset the inflation undershoot during “bad” times so that the longer-run average inflation rate and inflation expectations are in 2/3  BIS central bankers' speeches  line with the target. The third option is price-level targeting, including its various offshoots, such as nominal GDP targeting and temporary price-level targeting. In such a regime, the central bank commits to keep the price level near a steadily growing target path. Like average-inflation targeting, this strategy promises to overshoot the target inflation rate in “good” times to make up for the inflation undershoot when policy is constrained. In theory, both average-inflation and price-level targeting can solve the problem of anchoring inflation expectations at the target rate while maintaining a low inflation target rate amid low neutral rates. Although price-level targeting is a bigger leap from inflation targeting than averageinflation targeting, each can be implemented in ways that are very similar to standard inflation targeting, either in terms of forecast-targeting or a policy rule.6 Importantly, neither will likely be effective in practice unless communicated clearly and carried out consistently over time. More broadly, all of these proposed strategies face potential costs and benefits—in terms of macroeconomic performance, communication, and robustness to uncertainty—which require careful study. In considering alternative monetary policy strategies, academic experts, policymakers, and others from around the world have an important part to play, sharing and discussing ideas and comparing experiences to help all of us to think through these issues.

Overall, complexity may have resulted in more fragility, an evolution already foretold by Minsky who saw structural changes in financial systems over time as an essential cause of their vulnerability Complexity has deep implications for public policy and the future of financial regulation. •  First, about transparency. Improving transparency is the first item on the G20 international agenda, for financial regulation reform. Transparency is normally considered as a prerequisite to the existence of efficient financial markets. More recently, full transparency on aggregate positions and exposures by main financial intermediaries tends to be seen by financial supervisors as necessary to assess potential systemic risk. However, when the system is constantly morphing into new structures, and permanently changing networks, a comprehensive, but static vision may prove inadequate, because it will not eliminate the uncertainty stemming from the potential discontinuities embedded in market dynamics. What is needed, at least,  2  BIS Review 95/2009  is an overall understanding of the complex dynamics at work, which may be better reached through a permanent reexamination of their structure and constantly testing against very adverse circumstances. •  Second, robustness. A natural reaction to financial fragility is to strengthen the ability of financial institutions to withstand shocks by increasing their capital and liquidity requirements. While necessary, it is doubtful whether this "buffer" approach will help when uncertainty settles in. Then, the net demand for both liquidity and capital becomes infinite, because gross demand is unknown and hoarding creates little or no supply.