Notably, such organisations have also been instrumental in encouraging the development of a vibrant rental market as a viable alternative to home ownership. For example, in Australia and Hong Kong, social enterprises have had an important role in building affordable housing units or revitalising existing properties for sale or rental, typically targeted at lower-income groups. We need to consider how similar models could be developed here and the role of public policy to enable this. In the context of rental properties, a robust legal and institutional framework to safeguard the rights of tenants and landlords, mechanism to protect tenancy deposits, and arrangements for dispute resolution have been key success factors for countries that have a thriving rental market. At the same time, the introduction of “rent-to-own” schemes could also complement this. The Government has recently launched such a programme. We would welcome the private sector, particularly developers, to also explore such a strategy. Sound, innovative and coordinated public policy is central to addressing the affordable housing challenge. We have advocated that this should reside with a central authority that leads, oversees and coordinates affordable housing initiatives for the nation. This would promote greater strategic and operational cohesion at the national level. Regulatory processes that increase the cost of supplying affordable homes should be reviewed and streamlined. The central authority can also spearhead more effective communications and build stronger collaborations with key partners to advance the affordable housing agenda.

This is a reason why the central bank should act with foresight and be alert to the development of inflation expectations. BIS Review 8/1997  -2-  The potential for influencing fluctuations in activity around the trend is dependent on people’s appraisal of the central bank’s determination and ability to maintain price stability. Central bankers talk of the importance of credibility, by which is meant the extent to which people expect inflation to be in line with its targeted rate. The degree of credibility is conditioned by, for example, the historical record of inflation and the existence of government financial deficits. Weak credibility calls for caution in monetary policy, just as higher credibility confers more room in which to manoeuvre. Experience has shown, moreover, that even in the shorter run, the possibility of influencing employment and unemployment via monetary policy is very limited. Limited fluctuations around the growth trend are by no means sufficient condition for a smooth development of employment and low unemployment. Comparisons between countries and regions reveal that a similar growth pattern, even over a considerable period, can involve markedly divergent effects on employment and unemployment. This highlights the function of the labour market. It is there that measures must be taken in order to tackle problems with employment and unemployment. I want to underscore some conclusions from this discussion. Monetary policy cannot have growth as the primary objective because it is not capable of influencing growth in the longer run.