the collective efforts of all european citizens, the euro area has emerged from this crisis. the results of their and their representatives ’ determination have been tangible : 22 consecutive quarters of economic growth, the unemployment rate at its lowest level since october 2008, and wages and incomes on the rise. however, over the past few months, incoming information has continued to be weaker than expected on account of softer external demand and some country and sector - specific factors. the persistence of uncertainties in particular relating to geopolitical factors and the threat of protectionism is weighing on economic sentiment. 1 / 4 bis central bankers'speeches at the same time, supportive financing conditions, favourable labour market dynamics and rising wage growth continue to underpin the euro area expansion and gradually rising inflation pressures. this supports our confidence in the continued sustained convergence of inflation to levels that are below, but close to, 2 % over the medium term. significant monetary policy stimulus remains essential to support the further build - up of domestic price pressures and headline inflation developments over the medium term. this will be provided by our forward guidance on the key ecb interest rates, reinforced by the reinvestments of the sizeable stock of acquired assets. in any event, the governing council stands ready to adjust all of its instruments, as appropriate, to ensure that inflation continues to move towards the governing council ’ s inflation aim in a sustained manner. the euro ’ s external dimension the benefits of the euro have not been limited to the european internal dimension. standing together within the economic and monetary union ( emu ) allowed us to retain sovereignty that would otherwise be lost by individual countries in a highly integrated world economy. as already envisaged at the time of its creation, the euro symbolises the unity of a european continent that is better able to exert global influence. our togetherness in the emu gives us “ a greater say in international negotiation ” and enhances our “ capacity to influence economic relations ” – to quote the delors report. 2 over the past 20 years, the euro has become the second most important currency in the international monetary system. somewhere between 20 % and 40 % of global foreign reserves, foreign exchange transactions, international debt and international trade transactions are denominated in euro. and over 50 countries or territories use or link their currency to the euro. 3 this global standing brings benefits. for one, it lowers the transaction costs of trading internationally, making euro area firms more competitive. it also adds breadth and liquidity to euro area

was replaced in the 1990s by inflation targeting. central bank independence has also been greatly strengthened over the last decade, as an institutional safeguard to facilitate more successful monetary policy by mitigating the timeinconsistency problem. it is, we can see, very natural that search for a new monetary policy paradigm takes place when economic conditions have changed or novel problems have emerged. one of the most prominent issues in the present debate on monetary policy is the question of the desirability of the current modus operandi of inflation targeting, a core element of central bank monetary policy in many countries over the last decade. one contentious question in this regard is whether the target inflation rate should be adjusted. olivier blanchard and some others, for example, have proposed moderated inflation targeting operation, while also insisting on a strengthening of macroprudential regulation by the central bank. 1 meanwhile, more radical suggestions, of replacing inflation targeting altogether with a new policy framework, have also been proposed. professor carl walsh, for example, the eminent presenter in the second session of this conference, suggests price level targeting as an alternative to inflation targeting, arguing that under price level targeting inflation expectations can act as an automatic stabilizer. 2 the crisis has also pushed to the center stage of debate central banks ’ recent unconventional monetary policy measures, in acting as lenders of last resort or marketmakers of last resort. principal questions in this regard include issues such as when the central bank should implement such measures, how effective they are, and when and how the bank should ultimately withdraw them. our debate on all of these important issues at this conference is anticipated to help us very much in developing our monetary policy frameworks further. increased demand for a greater central bank role in financial stability another salient question posed to central banks by the crisis is that of the need for expanding their role into the area of financial stability – beyond their traditional roles of ensuring price stability and, in some countries, economic growth. there is especially strong demand that the central bank do more to help prevent financial instability. this issue has attracted much public attention in korea, in fact, as adding financial stability to our bank ’ s explicit objectives, in addition to price stability, has been one of the central issues related to the recent bill revising the bank of korea act, which remains pending in our national assembly. how to proceed in this regard is unclear, however. in particular, there is controversy about the policy instruments that the central bank can use to ensure financial stability