Additionally, in a highly interconnected global economy with greater international financial inter linkages, financial turmoil and stress in national financial systems will have ramifications that transcend borders. Given the high stakes involved, there has been increasing scrutiny of the values, professional norms, educational standards and incentives that drive and shape the behaviour of financial institutions. Much of this scrutiny has aimed at reinforcing the responsibility that financial institutions have to the broader society. The establishment of the Financial Services Professional Board (FSPB), thus marks a significant development towards achieving the highest standards of professional conduct including fair business dealings and ethics in the financial services industry that will be consistent with the long-term growth, stability and integrity of the financial system. It is envisaged that the Financial Services Professional Board will act as an industry-led independent board that will drive the development as well as the advocacy of professional standards, ethics and continuous professional development across the financial services industry. Central to this aim is the development of a culture within the financial services industry which places an unequivocal commitment to professionalism and ethics. In advancing this endeavour, the FSPB will promote, advocate and facilitate the identification, development and the adoption of professional and ethical standards across all sectors of the financial services industry. The primary purpose of such standards will be to clearly define the expected level of performance and ethical conduct that financial services professionals are required to achieve in the service of the public.

Although I see why it is difficult to define inflation targeting, I consider the definition given by Ben Bernanke as being the appropriate one. Accordingly, inflation targeting is “a framework for monetary policy characterised by the public announcement of official quantitative targets […] for the inflation rate over one or more time horizons, and by explicit acknowledgement that low, stable inflation is monetary policy’s primary long-run goal. Among other important features of inflation targeting are vigorous efforts to communicate with the public about the plans and objectives of the monetary authorities, and, in many cases, mechanisms that strengthen the central bank’s accountability for attaining these objectives.” The definition can be wrapped up by adding instrument independence for the Central Bank and the lack of an explicit intermediate target, as all factors affecting inflation are taken into consideration. An important feature of inflation targeting is the need for accountability of the central bank. Within the inflation targeting framework, this is enhanced by the public announcement and commitment to attain an inflation target. The explicit target and the public and transparent nature of inflation targeting also enable the central bank to withstand political pressures more easily and to overcome the so-called time inconsistency problem. In this sense, as Frederic Mishkin1 argues, central bank independence and inflation targeting are mutually reinforcing. Adopting inflation targeting is not just a matter of choice, but also of fulfilling a number of key requirements.