, our perspective of the economy. forced to decide, we chose to err, if anything, on the side of more evidence than needed, rather than disregarding key information ; we opted to be inclusive rather than exclusive. this choice has ruled out the use of simple rules for both internal use and external communication. a central bank does not want to mislead its public with the elementary logic of a two term linear reaction formula, only to surprise them whenever circumstances demand. so observers should never succumb to the easy temptation of blaming a central bank for failing to obey a simple rule. more fundamentally : they should never lose sight of the complexity of the ‘ economic story ’ behind the conduct of monetary policy in a world of uncertainty. in its interactions with the public, the ecb has never departed from an honest and faithful - if at times seemingly unwieldy - account of this complex reality. we have shared with the public the evidence reaching the governing council ahead of policy discussions. we have described in detail the economic rationale behind policy decisions. those decisions are explained in the press conference after the first meeting of the council every month, in the monthly bulletin, in numerous speeches by members of the council and in my testimonies to the european parliament. just listening to what i say about the current state of the economy and its direction can save all that time and effort devoted to uncovering the alleged secrets of central bank thinking, or the individual views of members of the governing council. experience after four years how did these three key factors setting the stage for a successful monetary policy have an impact on the functioning of the governing council and on the ecb ’ s monetary policy? looking back over the past years, i can see that the mutually reinforcing viewpoints of the two pillars have served as a balanced and comprehensive basis for analysis prior to monetary policy decisions. at the same time, the complex process of cross - checking information gathered from each of the two pillars has sharpened - rather than diminished - our awareness of the changing conditions in our economic environment. when confronted with new developments in the economic environment, the governing council has never hesitated to take resolute, timely action to pursue a policy stance which best serves the purpose of maintaining price stability over the medium term. regarding the conditions for maintaining price stability, in january 1999, the single currency was born into an environment of inflation rates hovering around 1 %, below the upper limit of the range considered to be consistent with price stability.

willem f duisenberg : challenges to the ecb ’ s monetary policy speech by dr willem f duisenberg, president of the european central bank, upon receiving the european banker of the year award on behalf of the governing council of the ecb, frankfurt, 16 may 2002 * * * introductory remarks lady mayor, karl - otto, andrew, distinguished guests, ladies and gentlemen, on behalf of the governing council of the european central bank, may i say that it is a special honour to receive the european banker of the year award for 2002. the council, which in two weeks ’ time will have been directing monetary policy for three and a half years, is proud to be the recipient of this prestigious award. since it was set up in june 1998, the governing council has discussed and deliberated in an atmosphere of collegiality and consensus. the search for broadly shared resolutions within the council has ensured that a balanced judgement could be reached regarding the true state of the euro area, which covers a vast geographical area and comprises highly diverse national economies. the council ’ s consensual approach has fostered a long - term perspective and preserved continuity with our past. seeking and obtaining a broad consensus on policy decisions and then explaining them carefully to the public on the basis of euro - area aggregate evidence has a threefold effect. it shields governing council members from pressures originating in their home countries ; it imposes a discipline on monetary policy by having a continuous, multilateral check of time consistency and policy direction within the council ; and it counters any public suspicion that a national bias may inform policy decisions. internal governance has been an essential tool in the response to the many challenges confronting the ecb since its earliest days. at the start of economic and monetary union we were faced with the extraordinary task of having to conduct policy with limited area - wide data, with several conventional statistical indicators still under construction and, of course, with the euro area undergoing a major regime shift. moreover, we were hard pressed - following the asian and russian crises in 1997 and 1998 - to handle a difficult and unpredictable situation which some thought would spiral further downwards. and at the same time we had to attend to the unique task of laying the foundations for our future action, thereby completing the work that had been initiated by the european monetary institute. the ecb had to be guided towards full possession of the necessary economic details about a new and unique monetary area with an economic weight comparable to that of the united states. so it must