duplication of effort. so i think it's really good to have everyone here in the room because better coordination is going to be essential if we're going to more efficiently deliver these projects going forward. i think, tomorrow, you're all going to discuss what sorts of commitments we can make on coordination ; i think that's really important. so this pacific banking forum is a key milestone in addressing the decline of correspondent banking relationships and facilitating this coordination, so i'd personally like to thank the governments of australia and the united states for convening this forum because it brings together the largest number of stakeholders to date to address this issue. we've got stakeholders from public and private sectors from over 20 nations, which is absolutely marvellous. i've been struck tonight meeting regulators, central banks, governments and private sector ; it's been astounding, the buy - in that we've got here. i think it's very clear that making progress in arresting the decline of correspondent banking relationships does require collective action of this wide variety of people that we've got here today, and we all need to step up to the plate here. this includes continuing to improve and enforce aml / cft standards. we need to ensure that pacific island countries are well supported in implementing those standards, and that's going to require effective collaboration from all of the development partners in this room. over and above the aml / cft standards, the private and the public sectors need to work collaboratively to stop the full withdrawal of correspondent banking relationships from any country ; that's really important. for our part, the reserve bank, the rba, we will continue to support development partners and pacific island central banks and banking authorities by providing technical expertise, and we'll be drawing on our long - standing relationships to try to facilitate coordination and advocate for positive outcomes in this region. 2 / 3 bis - central bankers'speeches finally, i'd just like to highlight something that all of you know : it's a difficult challenge and it's going to require all of us to be flexible. we need to be ready to change as initiatives develop, and we need to consider how we can overcome domestic challenges to move forward towards solutions. i want to thank you all for being here and for your participation, and i want to encourage you to use this opportunity to agree on what's required to move forward and to commit to prioritising the

down at some point before long, then presumably there is not that much of a problem. it would, in fact, be quite consistent with the inflation targeting framework we have been operating on for well over a decade now. the average inflation rate over a run of years would still be “ two point something ”. unfortunately, the situation at present is not quite as benign as that. the headline figure owes quite a bit to the unusually low result in the march quarter of 2007, which was affected by some unusual and temporary effects. when we get the march 2008 figures towards the end of april, we will most likely find that the rise over the four quarters is more like 4 per cent. that result itself will have various temporary factors affecting it, so it is not necessarily an immediate guide to how concerned we should be. to get a better feel for the component of inflation that is likely to be more persistent, we look at various measures of underlying inflation. as you know, there is more than one way of doing this, and in my judgement it is not sensible to be doctrinaire about any one underlying measure. but what is clear is that these series have all picked up, with the exact extent varying by measure. overall, the reserve bank, in its february 2008 statement on monetary policy, put the pace of underlying inflation over the past year at about 3½ per cent. that is no disaster as a temporary phenomenon either, but monetary policy has to be set with a view to winding that increase back within a reasonable period. now i need to be clear about the status of these underlying measures. the target for monetary policy is set in terms of the consumer price index. the objective is to achieve an average rate of cpi inflation of between 2 and 3 per cent. the “ on average ” specification is used precisely because the cpi is sometimes affected over short periods by factors that will not be there in a year or two ’ s time, when the effects of any monetary policy changes will still be coming through. for policy to chase those short term fluctuations would risk making the economy less, rather than more, stable. so we need to look ahead to where the cpi is likely to be in future, as well as where it is now. for that purpose, we employ analytical devices to help us detect what the ongoing trend in inflation is likely to be, and this is where the underlying measures are useful. they are not, themselves, the target variable. but a policy that targets future cpi inflation,