track record in stabilising real output close to potential. moreover, in that respect a credible and systematic monetary policy may lead wage setting parties to a swifter acceptance of necessary real wage adjustments. the presence of labour market rigidities significantly complicates the task of a stability - oriented monetary policy. it is therefore in the natural own interests of a central bank to insist on making excessively rigid labour market structures more flexible and not an overstretching of central bank competences, as it is sometimes portrayed in the public debate. summing up : monetary policy is well - advised to follow these guiding principles even in the more complex oil price shock environment. focusing on price stability to anchor inflation expectations, acting in a systematic strategy compatible fashion, and not trying to fine - tune the policy trade - off discretionary is the best way to confront the limitations of monetary policy in real - time and to limit the danger of becoming overburdened with tasks it can not fulfil. the eurosystem ’ s economic and monetary analysis in order to maintain price stability for the euro area over the medium term, the eurosystem has provided itself with such a systematic framework : its monetary policy strategy. two key elements are a quantitative definition of price stability by the governing council ( a year - on - year increase in the hicp for the euro area of below, but close to, 2 % over the medium term ) and an analytical framework for the assessment of all relevant information and analysis based on two pillars : economic and monetary analysis. the economic analysis assesses the short to medium - term determinants of price developments with a focus on real activity and financial conditions. the monetary analysis concentrates on a longer - term horizon. it exploits the long - run link between money and prices and serves as a means of crosschecking, from a medium to long - term perspective, the short to medium - term indications for monetary policy resulting from the economic analysis. how does the eurosystem ’ s strategy translate into day - to - day decision - making? given the vigour and perseverance of the current oil price shock, its impact on the euro area economy has to be analysed carefully. the transmission of oil prices can analytically be separated into direct, indirect and secondround effects. direct effects focus on the increase of energy components in consumer and producer prices in the short - term. indirect effects refer to medium - term transmission to non - energy components. finally

short - term ) costs of reforms for the private sector such as costs of compliance are often more visible and easier to measure than longer - terms benefits for society as a whole. some of these benefits arise through shifts in costs from the public to the private sector : withdrawing implicit public guarantees for financial institutions increases the costs of debt because creditors cannot rely on bailouts and thus demand higher risk premia. this will show up as a private cost. yet, society as a whole benefits if the financial system becomes more stable and if risk is not shifted to the public sector. the financial stability board ( fsb ) has recently developed a framework which will form the basis of internationally coordinated efforts aimed at assessing reform effects ( fsb 2017 ). at their summit in july 2017, g20 leaders expressed their support for this framework for the post - implementation evaluation of the effects of the g20 financial regulatory reforms ( g20 2017 ). this framework will guide ex - post evaluation work by the fsb and international standard setting bodies. the purpose of such evaluation work is to ascertain whether the g20 financial regulatory reforms are achieving their intended outcomes, and to help detect any material unintended consequences that may have to be addressed, without compromising on the resilience objectives of the reforms. among other things, the framework identifies methods that are useful for policy evaluation and discusses how well such methods address the challenges inherent in such analyses. the framework also specifies processes to be followed in evaluation work. to see why structured policy evaluation is needed, take the effects of increased capital requirements which are a key element of the post - crisis reform agenda. better capitalized banks are more resilient and can lend more to the real economy. at the same time, postreform trends in bank lending have differed across countries, banks, and industries. this raises a number of questions : has lending declined because of weaker credit demand? are banks lending more prudently? what has been the impact of regulations on stability and growth? does bank lending support sectoral reallocation – and thus growth? and what has been the effect of increased non - bank competition? aggregate time trends in lending do not answer these questions – and do not provide a good basis for policy decisions. rather, the detailed data across jurisdictions and the empirical methods for ( causal ) identification that are available can lay the basis for more informed policy decisions. c ) better evidence is also needed in order to promote growth - friendly policies. the need for good