that we concluded in july. the review was prompted by historically low interest rates driven by the trend decline in the equilibrium real interest rate, and the limits on lower interest rates as a result of the implications of the effective lower bound for monetary policy. we concluded that under these circumstances it is essential to build a sufficient inflation buffer. we agreed that a symmetric two per cent inflation target in the medium term suffices to create the monetary policy space required to be effective in tackling negative shocks. we also concluded that, if the economy is close to the effective lower bound, it is vitally important to adopt especially forceful or persistent monetary policy action to avoid negative deviations from the inflation target becoming entrenched. this may also imply a transitory period in which inflation is moderately above target. climate considerations played an important role in the strategy review. the ecb has decided on an action plan with an ambitious roadmap to incorporate climate - related goals into the monetary policy framework. monetary policy has many linkages to payment systems and market infrastructures, where the implementation of monetary policy operations eventually takes place. one such link is the issue of central bank digital currency, cbdc. this will be the theme of the third day of this conference and the topic of the keynote presentation by professor dirk niepelt. the eurosystem is closely following developments in digitalization and changing payment habits. in july 2021, it decided to launch an investigation phase to explore options for issuing a central bank digital currency in the euro area, a digital euro, and possible designs for this. this investigation phase for a digital euro will last 24 months. it will answer key questions on the design and distribution options for a digital euro. a digital euro would not replace cash but would complement it and provide european citizens with a safe form of money in a digital world. going forward, the eurosystem ’ s work on the digital euro will involve close dialogue with other european authorities and active engagement with stakeholders to ensure that the views of the general public and the private sector are properly considered and taken into account. no actual decision has yet been taken to issue a digital euro. rather, the eurosystem ’ s investigation phase is all about preparing for what the future may bring and require. after the investigation phase, a multi - year realization phase could then follow, but a decision by the eurosystem about whether or not to issue a digital euro will only come at a later stage. ladies and gentlemen, let me conclude.

tightening of monetary policy globally, both the extent and pace, has been unprecedented. without doubt, the ecb's rate increases are being transmitted forcefully to euro area financing and monetary conditions. however, the lags and the strength of transmission to the real economy remain uncertain. slide 2 recent events in the financial markets have heightened uncertainty, which may influence the transmission of monetary policy in the euro area, too. however, the euro area banking sector is resilient. the banks have strong capital and liquidity positions, well above the minimum requirements, and far above the levels prevailing before the global financial crisis. but of course we must remain vigilant to identify risks. my final point is on communication and forward guidance. i draw from research suggesting that central banks should never tire of communicating their objectives and outlining the elements of their monetary policy reaction functions. for the bank of japan, the recent decision to do a broad - perspective review of monetary policy will provide an excellent opportunity for such communication. when it comes to the ecb governing council, our communication guidance reflects the prevailing uncertainty. since march we have been providing information on the critical elements that we monitor in determining our data - dependent approach on policy rate decisions going forward. these elements are, firstly, an assessment of the inflation outlook in the light of incoming economic and financial data ; secondly, the dynamics of underlying inflation ; and thirdly, the strength of our monetary policy transmission. in our monetary policy stance, we have recently reached a point where rates are in restrictive territory. in my view, it is essential that we see a steady and sustained decline in underlying inflation before we start considering easing the policy again. the governing council has already made it clear that we will continue to follow this data - dependent approach to determining the appropriate monetary policy stance. the journey is not over yet. on that note, i shall conclude my remarks. i would just – finally – like to express my thanks for this opportunity to share my views with such distinguished fellow panelists. i look forward to our discussion. 2 / 2 bis - central bankers'speeches