and malmendier et al. ( 2021 ) for seminal papers on these behavioral factors. findings, how individuals react to inflation surprises depends to a considerable extent on the “ data series ” of inflation experiences they have accumulated during their lifetime. translating these results into the context of the current episode of surging prices can provide some thought - provoking insights. for example, whereas the inflation experiences of younger cohorts of policymakers would seem to be particularly dominated by persistently low inflation, the more senior colleagues among us are more likely to remember the high and volatile inflation periods of the 1970s and 1980s. according to my calculations, the mean age of the current members of the ecb governing council is 58 years. 5 in other words, the average central bank governor in the euro area may be too young to have a memory of the prelude to the volcker shocks. so, my little thought experiment yields an unambiguous policy implication : we clearly need a minimum age mandate for monetary policy committees to better foresee future inflation surges. in - the unlikely - case that you are skeptical about the unbiasedness of my scientifically grounded recommendations on this topic, i would strongly advise you to attend today ’ s session 2 and tomorrow ’ s first academic session, both on inflation expectations and perceptions. furthermore, tomorrow ’ s final session 4 will also teach us more on how we can make use of the wealth of micro data out there to better grasp real - time and past developments of the inflation process. sometimes we need to take a step back in order to find the right words to accurately describe the way forward. in his famous memoirs, “ the world of yesterday ”, austrian author stefan zweig painted a rosy picture of pre - 1914 europe as a “ world of security ”. 6 to zweig, world war i represented a watershed moment from which the continent never fully recovered during his lifetime, and which would shape the political, economic and social arena for years and decades to come. for europeans, russia ’ s invasion of ukraine in late february 2022 will likely mark a similar turning point in history. once again, a hitherto unthinkable war brought the european dream of a “ world of security ” to an abrupt end. first and foremost - and this point needs to be stated outright - this war causes unimaginable and unnecessary human suffering and destruction in ukraine. from the perspective of monetary policy, this war also puts a fresh spotlight on two drivers of inflationary

a minimum requirement for keeping the catchingup process going in the transition economies. but i am afraid that we have become very selective in our perception of central and eastern europe. we tend to take note only of certain developments and give some good advice. and sometimes i have moreover the impression that we easily fail to appreciate the enormous progress that has already been made in most of the transition countries, especially in those which are most advanced in reforms and transformation. ladies and gentlemen! the policy issues for a smooth further integration of accession countries into the european system of central banks and finally into the eurosystem were recently addressed at the " east - west conference ", organized by the oesterreichische nationalbank and the joint vienna institute, and at the high - level " vienna seminar on the accession process ", a specific conference of the eurosystem held here in vienna. i am convinced that the conclusions of these seminars will provide helpful guidelines for the years to come. the main conclusions are : • accession countries will need to further advance the process of bringing down inflation rates, while not delaying the much needed relative price adjustments within the economy. such price adjustments are part of the transition process and of structural real convergence and will typically entail inflation rates that will, for some time, range above those prevailing in the euro area. • the objectives of nominal and real convergence should be pursued in parallel. progress in nominal and real convergence will imply an orderly closing of the gap between the accession countries and the euro area economy, both in terms of per capita income and price levels. in order to reinforce each other, nominal and real convergence paths must be properly sequenced and mutually balanced. a fast - track move towards full nominal convergence and, in particular, towards complete monetary convergence could prove counterproductive in the pre - accession period. • an important element of structural real convergence is the further development of financial services structures, which were practically non - existent when transition started a decade ago. the main tasks are bank privatization, the development of a sound credit culture and the transformation of banks into efficient and competitive financial intermediaries. the three pillars of a functioning banking system are a high - quality corporate governance of banks, a market discipline in accordance with best - practice standards and an efficient banking supervision. in the transition economies, banking supervision should typically be located with the central banks, at least for the time being, as central banks have the necessary funds to perform this task, have established reputation and are, in any case