“Does Inflation Targeting Matter?” Ball L., Sheridan N. in: ”The Inflation-Targeting Debate” Bernanke B.S., Woodford M. (2005). 24  See Corbo V., Landerretche O., Schmidt-Hebbel K. “Does Inflation Targeting Make a Difference” in: N. Loayza and R. Soto (red.) “Inflation Targeting: Design, Performance, Challenges” (Central Bank of Chile: Santiago 2002). 25  Gürkaynak R.S., Levin A.T., Marder A.N., Swanson E.T. “Inflation Targeting and the Anchoring of Inflation Expectations in the Western Hemisphere”, forthcoming in Mishkin, Frederic and Klaus Schmidt-Hebbel (red. ), Series on Central Banking, Analysis and Economic Policies X: Monetary Policy under Inflation Targeting (Santiago, Chile: Banco Central de Chile), 2006 and Gürkaynak R.S., Levin A.T. Swanson E.T. “Does Inflation Targeting Anchor Long-Run Inflation Expectations? Evidence from Long-Term Bond Yields in the U.S., U.K., and Sweden”, Federal Reserve Bank of San Francisco Working Paper 2006-09, March 2006. 26  For example a question whether monetary policy should burst asset bubbles was hotly debated during the large European Central Bank conference on 16 to17 March 2006. 27  The examples are the following articles: N. Roubini “Why Central Banks Should Burst Bubbles”, mimeo, Stern School of Business and Roubini Global Economics, January 2006, and A. Posen “Why Central Banks Should Not Burst Bubbles”, Institute for International Economics Working Paper WP 06-1, January 2006. 28  Bernanke B. “Reflections on the Yield Curve and Monetary Policy”, Remarks by Chairman Ben S. Bernanke Before the Economic Club of New York, 20 March 2006. 8  BIS Review 32/2006  respectively so as to prevent possible deflation.

While we were initially less optimistic about buy-side adoption relative to the sell-side, our outreach efforts have indicated that once the buy-side sees the benefits the Code brings, they become enthusiastic adopters. The third reason why this Code will be different, is that it was developed by an unprecedented public-private partnership, and will be kept relevant over time. The development process for the Code was an intense and inclusive one, involving the participation of a wide range of market participants. Hence, we expect strong buy-in from market participants. This partnership also recognises the importance of keeping the Code relevant over time. Moving forward, the Code will be collectively owned and maintained by the local Foreign Exchange Committees (or FXCs), through the Global Foreign Exchange Committee (or the GFXC). The GFXC was launched in May this year, together with the publication of the Code. The GFXC, comprising members from key central banks and private sector market participants, will assess regularly if there are new market developments that should be included into the Code. It will also oversee a comprehensive review of the Code on a less frequent basis, keeping the Code relevant over time. Fourth, extensive outreach to market participants has been done and will continue. Over the past two years, extensive outreach was undertaken to more than 120 sell-side and buy-side industry associations, and key market infrastructure globally. The response has been positive. These efforts by the GFXC, central banks and local FXCs, to raise awareness and encourage adherence to the Code, will continue.