rates in the recent past. in several cases, quantified inflation targeting has served as a means of achieving the central bank independence necessary to focus more effectively on controlling inflation. that is, the adoption of an inflation target is frequently part of a broader program to increase the autonomy and transparency of central bank practice. but inflation targeting is not the only means by which to achieve these ends. again, the recent experience in the united states that i have noted is an object lesson in this regard. unfortunately, the empirical evidence for industrial countries available to date generally appears insufficient to assess the success of the inflation - targeting approach with confidence. for example, it is unclear whether the announcement of quantitative inflation targets lessens the short - run tradeoff between employment and inflation, and whether it helps anchor inflation expectations. in addition, some research, controlling for other factors, fails to isolate the benefits of an inflation target with respect to the level of inflation or its volatility over time, and output does not seem to fluctuate more stably around its potential for countries that have adopted numerical targets. 5 future data may or may not produce compelling evidence, but i maintain that the case today for inflation targets in countries that already enjoy low and stable inflation rates has certainly not been proved. with respect to both its practical implementation, particularly in the united states, and the empirical evidence to date, i submit that the adoption of a numerical inflation target does not promise any obvious incremental benefits, at least in countries that have already achieved reasonable price stability. that said, a continuing commitment to price stability is certainly important, and the federal reserve has established a solid record of such commitment. conclusion based on this brief review, i conclude that, at least since the policy reform of october 1979, most observers would agree that the federal reserve has achieved generally good policy practice and outcomes. in my assessment, good policy practice cannot be safeguarded with certainty using a single rule or framework, such as inflation targeting. good outcomes ultimately depend on flexible execution of an evolving strategy and policymakers with an unwavering commitment to low and stable inflation as the foundation for maximum sustainable growth. see for example, laurence ball and niamh sheridan ( 2003 ), “ does inflation targeting matter? ” nber working papers series, no. 9577 ( march ), and e. castelnuovo, s. nicoletti - altimari, and d. rodriguez - palenzuela ( 2003 ), “ definition of price

desired culture. through our supervisory process, we have seen that a number of firms have started this process by developing or refining employee surveys and 360 feedback processes to target issues of behavior and bis central bankers ’ speeches culture. some firms are incorporating case study discussions into training programs to highlight ethical dilemmas and decision - making. some are revamping senior level promotion criteria to reinforce what are the desired characteristics and behaviors of leaders. these efforts are at various stages in terms of their depth, breadth and maturity. supervisors will need to see how these frameworks evolve, and more importantly, see evidence of how these efforts yield results in the form of more open and routine escalation of issues, consistent application of “ should we ” versus “ could we ” in business decisions, rigor in identifying and controlling of conduct risk, and how compliance breaches factor into compensation. measurement and accountability for progress in developing a healthier culture across the industry is paramount to us as supervisors and central bankers. an important measurement of progress is employees ’ assessment of their firm ’ s culture. to this end, we encourage the industry to harness the various individual efforts that have been initiated at a number of firms in order to develop a comprehensive culture survey. this anonymous survey would be fielded across firms each year by an independent third - party and the results shared with supervisors. having a common survey instrument would promote benchmarking of, and accountability for, progress on culture and behavior. a core element of any firm ’ s mission and culture must be a respect for law. federal reserve guidance advises that banks should strive to “ [ m ] aintain a corporate culture that emphasizes the importance of compliance with laws and regulations and consumer protection. ” 4 to maintain such a culture, senior leaders must promote effective self - policing. if audit uncovers an instance of fraud in one unit, the firm ’ s leadership should ask, “ where else could this behavior occur? ” if the press reports fraud at a competitor in a particular business line, the same self - assessment should apply. “ could this happen to us, could we have a similar problem here? ” when fraud is detected, boards and senior leaders must ensure that they are informed promptly, and that a thorough inquiry is undertaken at once. the senior leaders of financial firms, and those who report to them, must also be proactive in reporting illegal or unethical activity. early self - reporting sends a powerful message to employees and to regulators about a firm ’ s respect for law.