. the banking supervision department intends to take further steps towards the uniformity and simplification of reports to customers on their banking and credit - card activities, and the provision of information about a given banking service before the customer commits him / herself by signing a contract the new fee schedule is an important move in this direction. 3. increasing the chances of other banks entering the banking system. the more banks there are in israel, the greater the choice facing customers, and the greater the competition. on this point there is a trade - off between the number of banks in the system — the more banks, the more competition – on the one hand, and their efficiency and robustness, on the other, and the latter is certainly a relevant consideration for the supervisory authorities this trade - off is a focal consideration when it comes to decisions on mergers between banks. the banking supervision department is already taking steps to remove barriers to increase the chances of an internet bank operating in israel, to advance the privatization of the postal bank and to regularize its banking activity, and to bring about the entry of a foreign bank into the field of retail banking in israel. all of which, without waiving considerations of bankingsystem stability. here it is important to stress the following two points : 1. the size of israel ’ s economy, the high technological level of its banking system, and israel ’ s geopolitical situation all play a part in foreign banks ’ considerations about entering israel ’ s retail banking market. 2. as i mentioned before, the attacks on banks, and i include in that the extensive legislative activity regarding banking, is likely to deter anyone, including foreign banks, from starting to operate in israel. some of the points made above are already being dealt with by the bank of israel, and others will be discussed by the ariav committee set up by the minister of finance and myself. the committee consists of the appropriate people in the relevant authorities and external experts in the field. the establishment of the committee signifies the importance that the ministry of finance and the bank of israel, among others, attribute to the development of israel ’ s financial system. now we must allow the committee to get on with its work and to present its conclusions in due course. i now turn to my last subject for today : 4. basel ii the adoption of the basel ii principles is one of the most important tasks being tackled by the banking supervision department, and hence, by the banking system as a whole. basel ii is an

mugur isarescu : inflation targeting - international experience and romania ’ s prospects speech by mr mugur isarescu, governor of the national bank of romania, at the conference on inflation targeting, bucharest, 30 march 2005. * * * ladies and gentlemen, i would like to begin by extending a very warm welcome to you to the national bank of romania. it is a great honor for me to open the conference “ inflation targeting : international experience and romania ’ s prospects ”. i would like to add that i am particularly pleased that such distinguished guests agreed to join us today and share some of their insights regarding inflation targeting. this spring marks an important moment in our history : in april 1880, the national bank of romania was established, and became the 19th central bank in the world ; now, 125 years later, our central bank is getting ready to become the 19th ( plus 3 ) inflation targeter. for a few years now, the national bank of romania considered inflation targeting to be the monetary policy framework suitable for the timeframe between achieving single digit inflation and joining the erm ii. my confidence in inflation targeting stems from my belief that price stability should be the primary goal of monetary policy and that there is full long run compatibility between this objective and economic growth. this has been proved by successful inflation targeting experiences of numerous countries, regardless of the level of economic development. although i see why it is difficult to define inflation targeting, i consider the definition given by ben bernanke as being the appropriate one. accordingly, inflation targeting is “ a framework for monetary policy characterised by the public announcement of official quantitative targets [ … ] for the inflation rate over one or more time horizons, and by explicit acknowledgement that low, stable inflation is monetary policy ’ s primary long - run goal. among other important features of inflation targeting are vigorous efforts to communicate with the public about the plans and objectives of the monetary authorities, and, in many cases, mechanisms that strengthen the central bank ’ s accountability for attaining these objectives. ” the definition can be wrapped up by adding instrument independence for the central bank and the lack of an explicit intermediate target, as all factors affecting inflation are taken into consideration. an important feature of inflation targeting is the need for accountability of the central bank. within the inflation targeting framework, this is enhanced by the public announcement and commitment to attain an inflation target. the explicit target and the public and transparent nature of inflation targeting also enable the central bank to withstand political pressures more easily and to overcome