that the new members will follow the example of ireland and not that of the former gdr. it is important to focus the enlargement process on what is relevant to the real economy. what is important for the candidate countries and the current eu economies is that the new members are given the chance to catch up with the eu. free trade ( as in the europe agreement ), stable institutions ( adopting and applying the eu's fundamental regulations, what is known as the " acquis " ) and a wise macroeconomic policy are the things we should hope for and expect – no more than that. the eu's institutions there was a discussion at the european council meeting in nice in december 2000 on the shaping of the eu's decision - making processes when the union is enlarged to include many more members than it has today. with regard to the ecb, the current regulations would lead to a situation where 34 persons would have the right to vote on monetary policy in the ecb council, if all of the candidate countries were also to take part in the monetary union. the council of europe therefore decided to introduce a clause into the regulations enabling the rules in the escb charter for participation in the governing council to be changed without having to call an intergovernmental conference. however, a change would still require unanimous support from all member countries and ratification by each of them. a proposal for a change in the voting right could be put forward by the ecb or the european commission. the new clause will come into force together with the treaty of nice when it is ratified by all of the current member countries. there is no given method of organising decision - making in a monetary union with many participants. an attempt to analyse the decision - making process in an enlarged ecb governing council has been made by the centre for economic policy research ( cepr ) in a report published in october 2001. the report discusses three models for improving the efficiency of the ecb councils'decision making in an enlargement of the number of participants in the monetary union : rotation, representation and delegation. that is to say, a rotating voting right between a number of central bank heads, similar to the federal open markets committee in the usa, the formation of constituencies of central bank heads with joint representatives on the ecb council, rather like at the bundesbank following the german reunification, and finally delegation to a small group of experts, roughly like the monetary policy committee in the uk. the cepr report

of canada working paper ( forthcoming ). bis central bankers ’ speeches in some exceptional circumstances where imbalances pose an economy - wide threat and / or where the imbalances themselves are being encouraged by a low interest rate environment, monetary policy might itself be the appropriate tool to support financial stability. monetary policy has a broad influence on financial markets and on the leverage of financial institutions that cannot easily be avoided. this “ bluntness ” makes monetary policy an inappropriate tool to deal with imbalances that matter only to a specific sector, but a potentially valuable tool in addressing imbalances that may eventually have economy - wide implications. furthermore, a general understanding that monetary policy will be used to counteract pre - emptively the buildup of such imbalances is likely to enhance the stabilizing impact of this approach. but this last point should not be overstated. the paramount goal of monetary policy in canada has been, and remains, price stability. the primary tools to deal with financial stability are micro - and macroprudential regulation and supervision. macroprudential tools are not a substitute for monetary policy in controlling inflation, and monetary policy cannot substitute for proper micro - and macroprudential supervision and regulation in maintaining financial stability. confirming canada ’ s flexible inflation - targeting regime armed with these insights, the bank and the government have renewed the inflationtargeting regime that has served canada so well over the past two decades. the core elements of the regime remain unchanged. the bank will continue to conduct monetary policy aimed at keeping inflation, as measured by the total consumer price index ( cpi ), at 2 per cent, with a control range of 1 to 3 per cent around this target. the inflation target is symmetric, which means that the bank is equally concerned about inflation rising above or falling below the 2 per cent target. the bank continues to use core inflation as an operational guide for its monetary policy because it is an effective indicator of the underlying trend in cpi inflation. core inflation, along with other measures of inflationary pressures, is monitored to help achieve the target for total cpi inflation ; it is not a replacement for the latter. a flexible exchange rate is also a core element of canada ’ s monetary policy framework. a floating canadian dollar plays a key role in the transmission of monetary policy and allows the bank to pursue an independent monetary policy. it also helps to absorb shocks to the economy. the inflation - targeting framework has always been flexible. typically, the bank seeks to return