same time, compared to holding at 3. 75 per cent, a dfr level of 3. 5 per cent offers greater protection against downside risks that could delay the recovery and lead to a material undershooting of our target further 1 / 3 bis - central bankers'speeches out in our horizon, including the risks associated with an excessively - slow unwinding of the rate tightening cycle. in the near term, headline inflation is expected to fluctuate over the next few months. in particular, headline inflation is expected to be low in september before rising again in the latter part of this year, partly because previous sharp declines in energy prices will drop out of the annual rates. negotiated wage growth will remain high and volatile over the remainder of the year, given the significant role of one - off payments in some countries and the staggered nature of wage adjustments. the forward - looking wage trackers also signal that wage growth will be strong in the near term. further out in the projection horizon, staff continue to expect a rapid decline in inflation, from 2. 6 per cent in the final quarter of this year to 2. 0 per cent in the final quarter of 2025. the expected drop in core inflation ( primarily services inflation ) is even sharper, from 2. 9 per cent in the final quarter of this year to 2. 1 per cent in the final quarter of 2025. indeed, the weaker economy and lower wage pressures that characterise the new projections mean the expected speed of disinflation in the course of 2025 has been upwardly revised. the expected significant deceleration in wage growth next year is in line with the information contained in the wage trackers and reflects the fading out of the " catch - up " dynamics that have driven wage growth in the last couple of years. the disinflation process in 2025 will also be supported by well - anchored forward - looking inflation expectations and weaker price - price and price - wage backward - looking dynamics, in view of the much lower inflation in 2024 compared to 2023. looking ahead, a gradual approach to dialling back restrictiveness will be appropriate if the incoming data are in line with the baseline projection. at the same time, we should retain optionality about the speed of adjustment. in one direction, if the incoming data indicate a sustained acceleration in the speed of disinflation or a material shortfall in the speed of economic recovery ( with its associated implications for medium - term inflation )

addition to the flexible monetary policy strategy implemented by the central bank as of the end of 2010, the prudent measures adopted by the brsa accompanied by the safeguarded fiscal discipline strengthened the central bank ’ s hand. we firmly believe that we will attain very positive results with respect to price stability and financial stability by the end of 2012. along with national macroprudential measures introduced by countries, some international criteria have also been developed for the sake of safeguarding financial stability. for example, the basel iii accords bring about new arrangements reinforcing the capital structures of financial institutions. these arrangements will ensure a more resilient financial sector against unforeseen risks and will contribute to financial stability. the recent efforts clearly point to a consensus among countries on the critical importance of safeguarding financial stability. despite the consensus among policy - makers on the importance of financial stability, the economic literature lacks adequate theoretical and empirical studies on the details of the transmission mechanism from financial stability to macroeconomic stability. at this point, academia is expected to do their share in this respect. the two - day conference will stage parallel sessions, panel discussions and presentations on these issues. banking sector dynamics, macroprudential measures and their impact on macroeconomic stability, systemic risk issue and sovereign debt dynamics are among the topics that will be addressed at the conference. two of our distinguished guests, mr. ricardo caballero and mr. franklin allen, will be delivering speeches. mr. caballero will be presenting a speech on the first day of the conference and mr. allen ’ s presentation is scheduled for the second day. on the second day of the conference, the panel discussion titled “ how did the crisis challenge the central banking as we knew it? what should ( not ) change? ” will be held, at which senior central bankers will be sharing their country experiences. i think this panel discussion will be very interesting and beneficial for all the participants. the studies that will be presented throughout the conference will contribute to better understanding of the factors threatening financial and macroeconomic stability and developing policies to achieve these two objectives simultaneously. i believe that the conference will also serve as a forum for the participants for exchanging views. in this respect, i would like to thank the organization committee for their efforts in bringing these very interesting and enlightening studies under this conference. i wish the conference a complete success and i would like to thank all our guests for their participation. bis central bankers ’ speeches