crisis, call this fact into question. the euro has established itself as a credible and strong international currency, trade among the euro - area countries has been fostered, financial integration has been given an enormous boost. price stability is now rooted in the conduct of economic agents : in the twelve years of the euro, annual inflation in the area has averaged just under 2 per cent, fully in line with the definition of price stability adopted by the governing council of the european central bank ( ecb ). this achievement is noteworthy, considering the headwinds the euro area had to weather, including substantial increases in oil and other commodity prices and the financial crisis. thanks to the credibility gained over the years, the eurosystem was able to keep inflation expectations steady during the crisis and to act with the speed and flexibility demanded by bis central bankers ’ speeches extraordinary circumstances. without emu, the response of the different monetary policies could not have been so rapid and decisive : it would have been practically impossible to achieve a similar level of coordination in the monetary field. this credibility must be preserved and i am fully committed to doing so. i believe its roots lie in the independence that the treaty grants to the ecb to pursue its mandate of maintaining price stability. i also firmly believe that, as a counterpart of its independence, the ecb must ensure that in the exercise of its responsibilities there is the highest degree of transparency and accountability, first and foremost towards the citizens and their elected representatives in the european parliament. i look forward to pursuing a fruitful, frank and open dialogue with your institution. we need responsible behaviour and decisions by all the parties involved, in the monetary, financial stability and economic fields. °°° starting with monetary policy, it is of the utmost importance to recall that the credibility we have earned will not necessarily last forever ; it cannot be taken for granted. an important challenge for the ecb is to manage the exit from the still very accommodative monetary policy stance and the phasing - out of the remaining non - standard measures. the measures adopted by the ecb were crucial to restoring orderly conditions on interbank markets, containing risk premia, and preserving credit flows to the economy in the worst phases of the crisis. we have avoided the collapse of the financial system, supported the functioning of the transmission of monetary policy to the economy and, ultimately, ensured price stability, thereby supporting the european economy. however, these measures are by their nature temporary. there have been a number

” finance and economics discussion series 2004 - 48 ( washington : board of governors of the federal reserve system, september ). sack and i note the power of even nonspecific central bank talk about the economic outlook to greatly influence expectations embodied in intermediate - and long - term interest rates. is it too much, as some argue? 4 is central bank talk about the economy crowding out other legitimate perspectives? this is an empirical question, and i do not think we yet have the studies to provide an answer. one way to frame the question would be to ask whether market forecasts over the intermediate and longer run have improved or deteriorated as central banks have ramped up their talk. i suspect that the greater provision of informed analysis from central banks has led to an improvement. in the united states, we have some indirect evidence that crowding out of private views has not increased even as the federal reserve has become more talkative. market interest rates have continued to respond substantially to surprises in economic data. the degree of the reaction to individual indicators has risen or fallen depending on the economic situation and the focus of policymakers ; for example, the reaction to price data decreased in recent years as low, steady inflation became more firmly established, and the reaction to labor market data increased as the “ jobless recovery ” became more of a focus. but we do not see a general falloff in the strength of response, as one might expect if markets were relying more on central bank views and less on their own interpretation of data. that markets continue to react strongly to incoming data is not surprising. predicting interest rates far enough into the future is not just about what others - including the central bank - think ; over time those rates should be tied to objective factors - for example, the forces of productivity and thrift. differing views about these factors give scope for opportunities to profit from independent research and betting against the crowd. earlier release of the minutes as evidence that our communication policy is a work in progress, the fomc has recently shifted its views in favor of expediting the release of its minutes. 5 minutes of fomc meetings necessarily contain elements of both policy inclination and economic outlook. benefits flow from a more timely release of a fuller, more nuanced explanation of why the policy decision was made than is possible in an announcement. the committee ’ s discussion, and the minutes of it, help to spell out the linkage the committee may see between any policy inclination and its economic outlook. the