But is there more that we can do to manage the tensions created by these economic 2/3  BIS central bankers' speeches  divergence? Put another way, how do we reconcile yet another paradoxical couple: independence and co-operation? Obviously the question is not to go back to a world of accords negotiated in hotel suites. But we can and should act to enhance co-operation between central banks. Such co-operation includes four elements: Mutual predictability of policy making. We will achieve the closest to a co-operative solution if we avoid large surprises between policy makers. While trade multilateralism is at risk, monetary and financial multilateralism stands fast, fortunately. This means continuing to favor dialogue and exchange of information among central banks, and to be very clear about our monetary policy regime choice. We should cherish the “great convergence” of policy objectives of the last fifteen years. Among major advanced economies, we now have domestic inflation targeting around a 2% medium-term objective. We are ruling out any currency war, as clearly stated in our unanimous Bali communiqué: ``We will not target our exchange rates for competitive purposes’’. On capital flow management (CFM) measures, we should support the ongoing reflections undertaken within the relevant international bodies and give priority to practical and pragmatic solutions – IMF type – rather than dogmatic purity. Last, I can only quote you, Tharman, and your impressive EPG report: “It is critical that we put in place a reliable Global Financial Safety Net before the next crisis” and co-ordinate its different layers.

The assessment of our near future and our current situation may change as time passes and as more accurate statistics become available. The functioning of the economy could also change. Monetary policy is oriented towards stabilising inflation and output growth. If unexpected disturbances arise and new information concerning the functioning of the economy emerges, the Executive Board must assess whether a different interest rate path may be more appropriate in order to achieve our  BIS Review 79/2005  5  objectives. The interest rate outlook may therefore change over time. The fan charts illustrate the uncertainty that can be expected based on recent history. The Executive Board discussed the main content of Inflation Report 3/05 before the report was published. On the basis of the analysis and the Executive Board’s discussion, the Board assessed the consequences for the future interest rate path and approved the monetary policy strategy for the period to the next Inflation Report in March. The interest rate path presented in the Inflation Report will, in the assessment of the Executive Board, provide a reasonable balance between the objective of bringing inflation up to target and the objective of stabilising developments in output and employment, conditional on the information Norges Bank had at the time the Report was published. The interest rate may gradually – in small, not too frequent steps – be brought back towards a more normal level. The objective of bringing inflation back to target and anchoring inflation expectations nevertheless implies that monetary policy remains expansionary.