shocks in food and energy prices, which led to a temporary hump in euro area inflation, followed by the large contractionary shock associated with the financial crisis and several months of deflation. these exceptional circumstances brought euro area hicp inflation to 4 per cent in the summer of 2008 and then to – 0. 6 per cent one year later. however, these large deviations from our definition of prices stability ( an annual inflation rate below, but close to, 2 % ) have been short lived. in line with the theoretical underpinnings of our monetary policy strategy, at the long - term horizon, the impact of all non - monetary shocks on inflation dissipates, so that inflation comes to be uniquely determined by money supply. it is for these reasons that the central banks bear the ultimate responsibility for inflation. this leads me directly to the sixth and final principle, pertaining to the crucial role played by the institutional framework for the conduct of monetary policy. if central banks are, de facto, ultimately responsible for keeping inflation low and stable, such responsibility ought to be clearly enshrined in institutional frameworks for the conduct of monetary policy. in this respect, a key virtue of the euro area ’ s framework is that it clearly assigns the european central bank that primary responsibility. let me now turn to the lessons we learned from the crisis. ii. lessons from the crisis and implications for policymaking although the financial crisis did not invalidate the just - discussed general principles underlying the conduct of monetary policy during the pre - crisis years, it nonetheless presented policymakers with several sobering lessons, calling for changes in both the intellectual framework surrounding monetary policy, and specific aspects of policymaking. on this see papademos and stark ( 2010 ), section 4. bis central bankers ’ speeches ii. 1. macroeconomic stability does not ensure financial stability the general assumption before the crisis was that the intense wave of financial innovation which had characterized the decade leading up to the crisis had contributed to making the financial system, and therefore the overall economy, more resilient. this resulted from “ spreading risk around ”, and allowing such risk to be borne by those most able to absorb it. such an assumption appeared to be validated by the experience of the two decades leading up to the crisis, the so - called “ great moderation ” era, which had been characterized by historically unprecedented decreases in macroeconomic volatility across advanced economies. there was also a broad consensus with regard to the u.

development committee ( joint ministerial committee of the boards of governors of the bank and the fund on the transfer of real resources to developing countries ) one hundred and one meeting washington, dc – april 17, 2020 ( virtual ) dc / s / 2020 - 0028 april 17, 2020 statement by ignazio visco governor of the bank of italy constituency of albania, greece, italy, malta, portugal, san marino and timor - leste statement by ignazio visco governor of the bank of italy constituency of albania, greece, italy, malta, portugal, san marino and timor - leste 101st meeting of the development committee april 17, 2020 washington, dc ( virtual ) the crisis the crisis we are facing is unprecedented in its speed, diffusion and depth. and it is a crisis that affects us profoundly : it touches our own lives, our network of social relations, and our way of living as a community. because the only way to limit the contagion is a protracted period of social distancing, significant economic pain seems unavoidable in all countries. the toll on the real economy — workers, as well as businesses — will be large ; and the risk of financial instability will inevitably be high. this exceptional situation requires actions to be taken at all levels : national, regional and global. indeed, precisely because the crisis is global, the answer must be global. increased coordination between countries in response to the pandemic will allow all of us to come out of it together, sooner and at a lower cost. and we must recognize that significant external assistance will be needed. if the response falls short of what is required to avoid permanent damage to potential capacity, including human and organizational capital, the scale of long - term costs could be much larger than what we are currently projecting, even under the most severe scenarios. the effects of the crisis will be more acute in poorer and more fragile countries. it is therefore important to engage with less developed countries with all available means. this is first and foremost a humanitarian duty, but it is also in everyone ’ s interest. developing countries are not an isolated world : many of them engage in global supply chains, and will remain an important part of the global recovery. to this end, recovery will be faster and broader if every country avoids national retrenchment and ensures the free flow of vital medical supplies, critical agricultural products, and other goods and services across borders, and if we all work to resolve disruptions to the global