For jurisdictions with floating exchange rates, monetary policy should instead be focussed on the only thing it could reliably determine in the long run, namely the price level. In many countries, this was codified into an explicit numerical inflation target; in others, the objective was left somewhat fuzzier. Focusing policy on the ultimate objective of price stability, rather than some intermediate variable, offered a policy framework that was both clearer to the public and potentially more durable. But the short-run stickiness of wages and prices, coupled with the desirability of avoiding excessive fluctuations in activity, meant that some “constrained discretion” in the pursuit of price stability was appropriate; this flexibility was usually incorporated explicitly into central bank mandates in one way or another. 6. Asset markets were thought to be efficient at distributing and pricing risk and financial innovations were normally welfare enhancing. While asset prices might be subject to bouts of “exuberance” on the part of investors, there was little that monetary policy could do about them. The best monetary policy could was to limit the fallout when sentiment turned. 7. Systemic financial crises were seen only in history books and emerging markets; they were unlikely to happen in advanced economies with their developed and wellregulated financial markets. Moreover, price stability and financial stability were natural bedfellows, the successful achievement of one facilitating the attainment of the other. Of course, agreement with each and every element of this consensus was not universal.

The crisis has clearly shown how inadequate regulation and excessive risk taking in the financial sector in developed economies can lead to unpredictable consequences in the real sector, both nationally and globally, stressing the need for a better understanding of the links between the financial and the real sector, such as and cross-border ties in the context of rising globalization. The fact that the roots of the global crisis were precisely in the financial sector suggests that most of the post-crisis needs for statistical changes touch exactly the central banks. Although the outbreak of the global crisis can not be attributed to the lack of statistical data, however, significant statistical gaps became evident and they are best reflected through the G-20 Data Gaps initiative for identifying recommendations to fill in these statistical gaps. The recommendations are mainly located in the following key segments: The first segment is better recognition of the increase in the financial sector risks. It was found that timely detection is extremely important for protection against crises. In this domain, emphasis is placed on developing a broader base of financial stability indicators, which we prepare on a regular basis. In fact, in the post-crisis period, this recommendation led to a dramatically increased number of central banks that prepare these indicators. Also, in the context of financial systems and markets, a focus was placed on detailed data on securities, in order to obtain a better analytical infrastructure to detect the risks of individual exposures and cross-sectoral spillover.