, and thus cause unwanted market reactions. the current monetary policy normalization is unprecedented, and well - structured communication ( providing guidance on how the central bank will proceed ) is needed to smooth the process. i believe that forward guidance has become an effective supplement to conventional tools ; should we need another monetary easing cycle soon, conventional instruments would arguably play a less prominent role than in previous downturns. to wrap up, i think it is safe to say that central bank communication has become a proper monetary policy tool. the statements following monetary policy meetings in every major central bank gather a substantial attention, and watchers analyse every sentence – down to the last word. 3 / 4 bis central bankers'speeches consequently, any change in communication – either what is said or what is left unsaid – is immediately noticed and widely interpreted. to water down the statements into less detailed, more “ reserved ” language would be, in my opinion, going backwards in terms of the pursuit of greater transparency and credibility. it is worth bearing in mind that the latter is directly linked to achieving the core price stability target. thank you. 4 / 4 bis central bankers'speeches

speech by gediminas simkus at the conference " monetary policy in a new european reality " 2022 - 06 - 11 speech by gediminas simkus, chairman of the board of the bank of lithuania, at the first conference for central banks of the three seas initiative ( 3si ) countries " monetary policy in a new european reality ", where he moderated a panel discussion on the evolution of structural underpinnings of monetary policy. check against delivery 1 of 1 “ evolution of structural underpinnings of monetary policy ” panel ii – monetary policy in a new european reality 10 june 2022 initial remarks good afternoon, dear colleagues, ladies, and gentlemen, first and foremost, i would like to thank the organizers – the narodowy bank polski – for bringing us together in this conference under the three seas initiative to discuss the monetary policy in a new european reality. i hope this is just the first conference in the line of many where the central bankers from the twelve eu member states located between the baltic, adriatic and black seas meet and share their experiences. we share a lot of common challenges, while some issues we face are country specific. as the old saying goes, two ( or more ) heads are better than one in finding optimal strategies. i therefore wish us all a fruitful exchange of views. let me start with a few thoughts on structural underpinnings of monetary policy and how they are likely to change in response to latest shocks. the ecb has published the outcome of its strategy review one year ago. for us, central bankers, the crucial finding of this review was the acknowledgement that the neutral, or, in other words, equilibrium rate is much lower today than it was several decades ago. this significant decline was led by various structural factors, for example : • the slowdown in productivity growth, • changing demographics, • and increasing demand for safe assets. productivity growth has been on a downward trend for several decades due to the sluggish labor productivity growth. changing demographics and, in particular, population ageing led to a decrease in working - age population. furthermore, lower growth rates of investment have weighed on capital stock contributions to potential growth. these were the insights from the ecb strategy review – the review we concluded when the covid - 19 pandemic was just about starting to recede due to increasing availability of vaccines, and when the idea of a full - scale war in europe was deemed to be more of a fantasy than