a sufficient buffer away from zero were articulated during our strategy review in 2003. it compensates for possible measurement bias, helps countries rebalance their economies within a monetary union and creates a buffer against deflation, as well as leading to higher nominal interest rates over the medium term. that helps ensure that monetary policy is not forced too often towards the effective lower bound – the level of interest rates at which further cuts do not have the desired positive impact – when faced with shocks that push inflation too low. since 2003, the ecb has used a double - key formulation to set our objective, defining price stability as a year - on - year increase in inflation of “ below 2 % ”, while aiming for inflation of “ below, but close to, 2 % ”. https : / / www. ecb. europa. eu / press / key / date / 2020 / html / ecb. sp200930 ~ 169abb1202. en. html 1 / 7 30 / 09 / 2020 the monetary policy strategy review : some preliminary considerations this formulation was appropriate at a time when the ecb was seeking to establish credibility and too - high inflation was its main worry. as our research shows, it was a key factor in successfully capping inflation expectations. but in the current environment of lower inflation, the concerns we face are different and this needs to be reflected in our inflation aim. ensuring that there is sufficient space above zero to re - empower conventional monetary policy becomes more important. and, to underpin inflation expectations, we need to ensure that our aim is perceived to be symmetric by the public. so we should have an inflation aim that the public can easily understand. the second issue is the horizon over which price stability should be achieved, which is captured by the ecb ’ s “ medium term ” orientation. this forward - looking orientation reflects traditional and wellestablished principles of prudent monetary policy, which is consistent with the notion that monetary policy works with a lag and can influence inflation over the medium term rather than the near term. but within the ecb ’ s framework, the medium - term orientation has also been a way for the governing council to take into account what is happening in the real economy, including employment. we have a hierarchical mandate with price stability at the top. but the medium term, which is a flexible concept, allows us to avoid unnecessarily constricting jobs and growth in the event of a supply shock which temporarily pushes up

in 2013. this is a reflection of the positive outcomes of policy initiatives by the government and the central bank as well as the initiatives of the financial sector players and their innovations. there is scope for further deepening of the financial sector, and especially the banking industry, and as a result, this will lead to further financial inclusion. even with the industry ’ s assets looking impressive at the levels i highlighted earlier, they still remain below 50 percent of our gdp. economies that have achieved higher levels of development, accompanied by high levels of financial inclusion have a higher banking assets to gdp ratio, with some well over 100 percent. with the level of innovation and dynamism in our banking space, there is no reason why we cannot aspire to be like those economies and grow our assets with strong banks and a strong policy drive to financial inclusion for financial development. i see research being at the centre of such growth. as a researcher myself, i know that collaboration will remain core. i commend the kba for seeking collaboration with other institutions, among them the central bank, in its research efforts. i see that collaboration in this research conference manifested in the diversity of paper authorship. i look forward to seeing the conference papers reviewed and put in the public domain so that the intended purpose of promoting an idea - based engagement is realized as well as development based on a certainty policy path. with those remarks, i declare this conference officially open, and wish all the participants fruitful engagements over the next two days. thank you for your kind attention. bis central bankers ’ speeches