are that both upside risks to inflation and downside risks to output growth will continue to remain elevated in the next few weeks. given this outlook, we have reiterated that we will act in a firm and timely manner in order to deliver price stability over the medium term. at this point, it is of particular relevance that second - round effects are avoided and that longterm inflation expectations remain anchored at levels consistent with price stability. appropriate measures of price stability but back to my original subject : the aspect of volatile energy and food prices has been taken up in this conference from another angle – one that is highly relevant to monetary policy : the question of the appropriate measure of inflation ( see : mark a. wynne : how should central banks define price stability ). the appropriate treatment of supply shocks by central banks with price stability as their primary goal certainly does not mean that monetary policy should counteract each and every short - term price shock. owing to the well - known time lags of monetary policy, this would introduce short - term volatility in interest rates and output that might be regarded as unwelcome. the monetary policy strategy of the eurosystem takes this aspect into account in that it defines price stability as a medium - term objective. this, in my view, goes a long way towards reaping the postulated benefits of defining price stability by core measures rather than by headline figures, while avoiding some of the pitfalls of targeting core inflation, such as communication and accountability issues or observable trend inflation in excluded components, e. g. oil prices. thus, i completely agree with mark a. wynne when he states that measures of headline inflation at the consumer level are best for defining price stability. in addition, mark a. wynne ’ s paper touches upon a highly relevant issue in the context of asset prices when discussing the treatment of owner - occupied housing. here, i have repeatedly argued that the euro area hicp should include owner - occupied housing. but, just as an aside, i would prefer not to discuss this issue in the context of asset prices. including owner - occupied housing using the net acquisition approach is focused on housing as a consumption good, not as an asset price. 2. 2 monetary policy and financial stability central banks as liquidity providers as forrest capie already outlined in his survey paper, financial stability has been a key defining historical feature of central banking. central banks acted and continue to act as lender of last resort, that is,

’ speeches reinforce the role of eu - level institutions in the management of financial stability in the euro area. with significantly more diverse economies and financial systems, promoting greater regulatory convergence in asia is more likely to proceed on the basis of a set of shared principles for developing and maintaining sound financial systems, while providing for the unique and distinct legal, financial, social and economic structures of individual countries within the region. it will be important to have clarity around the key principles, an inclusive process in agreeing on these principles, and mechanisms that support their effective implementation in individual countries. under such an approach, individual countries will have the necessary degree of flexibility to tailor national implementation approaches to reflect the specific characteristics of their respective economies, while committing to uphold the essential regulatory and supervisory principles that underpin financial stability. with asia ’ s varied experience in weathering financial crises, in developing our financial systems and in implementing the various regulatory reforms, valuable lessons can be drawn from the region to advance the progress and development of our respective financial systems and of the region as a whole. seacen has had an instrumental role for more than 30 years in the efforts to share this knowledge and experience widely among its members through providing a platform for such information sharing and through its research, training and capacity building initiatives. today, seacen takes yet another important step forward in advancing this agenda with the launch of the seacen financial stability journal. we live in a world in which the management of financial stability is a highly complex undertaking, and its dimensions have continued to evolve in an environment that is rapidly changing. it is hoped that the journal will contribute ideas, perspectives and insights and thus generate the intellectual dialogue and discourse on financial stability issues. as a region, asia has many unique perspectives and experiences to share with others facing similar challenges in managing financial stability. i congratulate the seacen centre on this important initiative. i wish it every success and look forward to contributions from seacen members and from the other parts of the world. the journal can have a significant influence in drawing attention to the financial stability issues that are most important and thus contribute towards the thinking and responses on these issues. it is a process that should have an inclusive participation in this important agenda of financial stability. bis central bankers ’ speeches