it is therefore inevitable that the target might be missed in the short term. monetary policy does not have to hastily respond to every change in the data. however, the governing council very much does have to respond to signs that the target will be missed over a medium - term horizon. and the council has to explain its policy to the general public. that ’ s more important today than it ever was, given that inflation in the euro area has been above 2 % for more than a year now, and currently exceeds 9 %. and it looks set to persist well above 2 % next year, too – the latest ecb ( european central bank ) staff macroeconomic projection expects the rate to come to 5. 5 %. alongside its narrow mandate focused on price stability, the eurosystem ’ s accountability is an important counterpart to its independence. in a democracy, you see, the general public must be able to understand whether the central bank is fulfilling its mandate – whether it is doing its job properly. the monetary policy strategy is also supportive in this regard as a benchmark for successful monetary policy. 4 the maastricht regulatory framework the maastricht treaty created the institutional framework for the euro. besides enshrining the ecb ( european central bank ) ’ s mandate and independence, it also lays down the prohibition on monetary financing of government. this underscores the separation between monetary policy and fiscal policy. in addition, that treaty established limits for new borrowing and debt levels so that monetary policy does not come under pressure in practice and is not forced to step in and support fiscal policy. theory and practice alike have shown just how important sound government finances are for the success of a stability - oriented monetary policy. the maastricht regulatory framework has the single monetary policy on the one side and the national fiscal policies on the other. the stability and growth pact then followed soon thereafter, fleshing out the provisions of the maastricht treaty. in practice, though, this set of rules lacked binding force. the european commission will now soon be presenting its proposals on the reform of european fiscal rules. the bundesbank also sees a need for reform. [ 9 ] above all, it is important that the rules are designed to be transparent, comprehensible and verifiable enough to ensure greater credibility and binding force than in the past. clear, quantified requirements are crucial for this. these need to be selected in a way that high debt ratios can be

andreas dombret : " basel iii - are we done now? " statement by dr andreas dombret, member of the executive board of the deutsche bundesbank, statement by dr andreas dombret, member of the executive board of the deutsche bundesbank, at the institute for law and finance conference on basel iii, frankfurt am main, 29 january 2018. * * * thanks nicolas, it ’ s a great pleasure to contribute to this panel. and, on behalf of the bundesbank, i am happy to see that so many outstanding experts accepted our invitation. please let me start with a confession : i strongly support the basel iii finalisation package – in these times, a global minimum standard is a crucial ( and noteworthy ) success. it contributes to stabilising the global financial system and prevents regulatory arbitrage. when talking about basel iii, many banks or lobbyists may think : “ things are never as bad as they seem. ” of course, they are hoping for of a less strict implementation of the basel standards. but i have to say that i, in their stead, would not cherish these hopes. looking ahead, all basel committee member jurisdictions must do everything in their power to ensure full implementation. but as important as basel iii is, we should not forget what it was made for — and what not. the basel iii standards are, first, minimum standards for, second, internationally active banks. let me say a few words about the first point : since basel standards are minimum standards, a country may decide to set stricter requirements. the second qualification of the basel iii standard is that it is for internationally active banks. as such, jurisdictions are free to apply a different set of rules to smaller, only nationally active banks that pose no threat to international financial stability. in sum, then, we should focus on truly global aspects, like regulating globally active banks, while leaving it to nation states to carry out those tasks that they are better suited to take care of, for example the regulation of locally active banks. in this sense, let ’ s not forget the former governor of the bank of england, mervyn king, who said : “ banks are global in life, but national in death. " to make one thing quite clear : there is no alternative to global standards, but within their implementation, we must not forget that a “ one size fits all ” approach does not always reflect national different banking systems. so, in sum : yes,