##lnerabilities in a targeted way. ” not only that i share his view, but i have to say that, in romania, we started practicing what he speaks about now even before the outbreak of the global crisis. we resorted to forex interventions in order to mitigate the exchange rate volatility and we took prudential measures to contain excessive growth of credit ( of forex lending in particular ). the imf mentioned the nbr as being among “ the pioneers ” of what was later referred to as “ macroprudential instruments ". as a matter of fact, back in 2005, being aware of the risks associated with the free capital movement and subsequent ample fluctuations of the exchange rate, the national bank of romania decided to adopt a “ light ” version of inflation targeting. we deemed it more suitable than any other option in terms of sustainably achieving price stability, while limiting the cost of excessive volatility in output and employment. in fact, the nbr ’ s overall approach has been a balanced one. on one hand, we did not ignore the threat of inflation for the sake of fast and easily gained ( and therefore unreal ) prosperity. on the other hand, we tried to avoid becoming, in mervyn king ’ s words, an “ inflation nutter ". let me emphasise that the classic recipe of inflation targeting would recommend a policy rate hike at the current juncture in some of the cee countries. however, in poland, czech republic, hungary and romania, policy rates currently stand below the inflation rate. and precisely because we are not cut off from what is going on around us, the nbr ’ s monetary policy stance should be assessed in a regional context. but beyond the regional environment, if we look at advanced economies and, in general, at the euro area, we see low inflation and modest economic growth rates prevailing. they do not necessarily call for a tightening of monetary policy. by contrast, cee countries have rather high inflation and significant economic growth rates, therefore the context would be described in a textbook as adequate for tightening. yet, in the case of these countries, there is a real risk posed by speculative capital inflows. as long as negative real interest rates prevail in europe, straying too far away from our regional peers in terms of policy rate would invite considerable appreciation pressures. while helpful in terms of taming inflation, these would not be welcome, given romania ’ s increasingly significant external imbalance that

that have contributed to the development of the romanian financial and banking system : the financial and enterprise sector adjustment loan ( fesal ) – a program that focused on reforming the financial sector, and the private sector adjustment loan ( psal ) – which has offered support towards the privatization of the romanian banks and to the development of the monetary and capital market, in line, as well, with our objectives of european integration. the international financial corporation ( ifc ) – an institution member of the world bank group that romania joined in 1991 – has supported the romanian banking sector by investing in various romanian banks, especially during the privatization process. i welcome the current involvement of the world bank in projects that aim to improve the health and education sectors, to reduce poverty, as well as projects focused on climate issues. lastly, i thank you for the invitation to take part in this event. i am honored to be here, celebrating 30 years of renewed partnership and cooperation between romania and the world bank. to the team in bucharest office of the world bank – which i considered, during these 30 years, as being competent and dedicated, aligned with our endeavors – i extend my warmest congratulations. happy anniversary! at the same time, i would like to take the opportunity to express my appreciation for the management and staff of the world bank in washington for their work in pursuing the bank's mission to foster sustainable development and promote social prosperity around the world. thank you for your attention! 2 / 2 bis - central bankers'speeches