will evolve once instant payments are introduced in the near future. at the same time, while cash remains popular, in some countries there is a move towards newer payment methods. there is an important role here for financial institutions to facilitate and foster these newer methods. permitting and enabling customers to manage their finances in the manner that most appeals to them encourages loyalty. it is still vitally important that any form of payment offers protection to its users and engenders trust. such services should have the necessary security and data protection measures in place. nonetheless, banks should see such developments as a positive opportunity to engage with customers, rather than react with protectionist urges. as in other economic areas, protectionism is rarely welfare enhancing in the long run. let me dwell briefly on regulation for my final remark today. adequate regulatory standards are vital to maintain trust between financial institutions and to ensure continued market functioning in the presence of shocks. it also follows that setting global standards is necessary to underpin the global nature of finance. in the long run, no - one – including financial institutions themselves – benefits from a regulatory race to the bottom. lobbying for particular special interests in regulation can, in the end, be counterproductive if it succeeds in derailing moves to agree international standards. conclusion the recovery in the euro area is gaining more and more traction. the confirmation of a broadly balanced risk outlook for growth is within reach. the extraordinary monetary policy measures introduced since 2014 are bearing fruit. they have supported price stability in particular by buoying domestic demand, which is now the supporting pillar of the ongoing recovery. the financial sector has an important role to play in supporting that recovery and ensuring 4 / 5 bis central bankers'speeches continued resilient growth in the future. a well - functioning, profitable and resilient financial sector is therefore vital for the long - term economic prospects of the euro area. there are challenges ahead, be they technological, regulatory or political, but the banking industry in the euro area is well - positioned to foster sustainable growth in the coming years. 5 / 5 bis central bankers'speeches

transitory inflation seems more probable than a durable shift above target in the inflation trend and an unmooring of inflation expectations to the upside. when considering the inflation outlook, it is important to remember that inflation has averaged slightly below 2 percent for over a quarter - century. in the nine years since the fomc ’ s announcement of a 2 percent inflation objective, 12 - month pce inflation has averaged under 11 / 2 percent. readings of 12 - month inflation have been below 2 percent in 95 of those 109 2 / 4 bis central bankers'speeches months. according to recent research, statistical models estimate that underlying core pce inflation ranges from one - to four - tenths of 1 percentage point below our 2 percent longer - run target. 9 recall that at the end of 2019, with unemployment at a multidecade low and after the addition of almost 1 - 1 / 2 million workers to the labor force during the previous year, pce inflation was 1. 6 percent for the year. monetary policy with that outlook in mind, let me turn to monetary policy. after an extensive review, the fomc revised its monetary policy framework to reflect important changes in economic relationships characterized by a low equilibrium interest rate, inflation persistently below target, and low sensitivity of inflation to resource utilization. the new framework calls for monetary policy to seek to eliminate shortfalls of employment from its maximum level, in contrast to the previous approach that called for policy to minimize deviations when employment is too high as well as too low. it emphasizes that maximum employment is a broad - based and inclusive goal assessed by a wide range of indicators. in addition, in order to keep longer - term inflation expectations well anchored at our 2 percent goal, monetary policy will seek to achieve inflation that averages 2 percent over time. consequently, following periods when inflation has been running persistently below 2 percent, appropriate monetary policy will likely aim to achieve inflation moderately above 2 percent for some time. these changes mean that we will not tighten monetary policy solely in response to a strong labor market. the long - standing presumption that accommodation should be reduced preemptively when the unemployment rate nears estimates of the neutral rate in anticipation of high inflation that is unlikely to materialize risks an unwarranted loss of opportunity for many of the most economically vulnerable americans. 10 it may curtail progress for racial and ethnic groups that have faced systemic challenges in the labor force. instead, the shortfalls approach will enable the labor market to continue