gertrude tumpel - gugerell : policy challenges facing the euro area speech by ms gertrude tumpel - gugerell, member of the executive board of the european central bank, at the distinguished speaker seminar, european economic and financial centre, london, 23 july 2010. * * * ladies and gentlemen, it is a great honour for me to have been invited to speak here today by the european economic and financial centre. my topic today will be the policy challenges facing the euro area, which is a rich topic : in fact, there is no shortage of challenges for us. what started as financial turmoil in august 2007 turned into a global financial crisis following the failure of lehman brothers in september 2008. more recently we have witnessed an exacerbation of sovereign debt concerns. the economic outlook is still surrounded by a high degree of uncertainty. however, a path out of the worst financial crisis of our generation seems to be in sight, and there are signs that a recovery is under way. yet, the return to normality could be gradual. it requires support. therefore, we need to assess all developments carefully. as albert einstein once said, we have to “ learn from yesterday, live for today, hope for tomorrow. the important thing is not to stop questioning ”. in fact, we have learnt a lot from the past few years. facing the current challenges and addressing them now and in the future will be key to more sustainable growth, more stable financial markets and an even more successful euro. i will start with the achievements of the euro and the single monetary policy, particularly in recent years. i will then set out some of the main challenges ahead, along with the remedies and policy priorities. i. the ecb ’ s actions during the crisis the euro area has been the focus of a great deal of attention in the last few weeks. but let me be frank : the euro itself is not the issue. quite the contrary, the euro is an achievement that has met with great success. the introduction of the euro has resulted in deeper financial and economic integration with great benefits for the economy of the euro area as a whole and beyond. intra - euro area trade in goods and services has increased notably. the “ home bias ” in financial markets has declined steadily. and, since the launch of the euro, an increasing share of foreign direct investments are taking place between euro area countries. perhaps the most important benefit of the euro has been the success of the monetary policy framework for the

the end of mumbling incoherence : enhancing credibility, effectiveness and trust through better central bank communication - governor gabriel makhlouf 26 february 2020 speech remarks at the 6th diw lecture on money and finance introduction thank you, i am very pleased to be here today. 1 since i joined the governing council last september, there has been much speculation about our review of monetary policy strategy, the rst since 2003 and recently launched by president lagarde. such a review is good practice. since the economy evolves and develops over time, so too do the challenges for economic policy more broadly and for monetary policy. taking a step back from the day - to - day conduct of policy to re ect on the bigger picture allows us to ensure that our approach remains t for purpose. we can and should periodically question the assumptions underlying our decision - making. some of these are important for our understanding of the environment in which we operate. for example : how has demography, technology and greater global interconnectedness affected the natural rate of interest? what is the role of structural reform and scal policy in supporting monetary policy objectives? how do macro - prudential policies and monetary policy interact? how do the signi cant technological changes of recent years, combined with structural shifts induced by the crisis, affect our understanding of the economy? while most of these issues are largely outside the control of monetary policymakers, we should consider them when making decisions. in contrast, some questions are within our power to control : what do we mean by price stability? is our measure of in ation the right one? are we communicating well enough? today i will focus on questions that are within the power of the governing council to impact directly. in particular, i want to explore the role and evolution of central bank communication, and how we can continue to develop our dialogue with the public. central bank communication – how did we get here? not so long ago, successful monetary policy was believed to be mainly a matter of managing overnight interest rates effectively ; communication with the public was of little concern for central bankers. this held true even in the years following the radical institutional reforms that made monetary policy conduct increasingly independent from governments. such reforms followed the understanding that governments ’ objectives are sometimes at odds with central banks maintaining price stability. the public can read such misaligned incentives, anticipate the likely course of policy action, and consequently frustrate its effectiveness. robert lucas pointed out that relationships between macroeconomic