definition of price stability is a medium - term, forward - looking concept. inflation does not always have to be in the target range of close to, but below two percent. given the long and variable time lags in monetary policy, we do not fine - tune the inflation rate. these lags are sometimes shorter and other times longer. and in the current situation in which we are still in the aftermath of a financial crisis, this lag is probably longer. 6 / 7 bis central bankers'speeches in my view, the current economic outlook together with the improvement in the balance of risks suggests that the governing council is beginning to discuss whether and when it will be time to adjust our forward guidance. 6. conclusion ladies and gentlemen, i recently read a new book entitled “ the seventh function of language ". it ’ s a novel about the murder of a linguist who discovered how to unleash the language ’ s magical powers of persuasion. if central banks had these powers, life would be much easier. but laurent binet ’ s book is fiction - and happily so, i would add. communication is not so easy in the real world, at least not for central banks. it always contains an element of trial and error : we have to see what works best. and in doing so, we keep a close watch on what suggestions research has in store. so let me conclude with these words : keep up the good work. thank you. 1 m j m neumann ( 2007 ) : pre - commitment and guidance, lessons from the bundesbank ’ s history. in : monetary policy - a journey from theory to practice. an ecb colloquium held in honour of otmar issing. european central bank. 2 w poole and r h rasche ( 2003 ) : the impact of changes in fomc disclosure practices on the transparency of monetary policy : are markets and the fomc better “ synched "? 3 j lange, b sack and w whitesell ( 2003 ) : anticipations in monetary policy in financial markets. journal of money, credit and banking, 32 ( 3 ) : 435 – 441. 4 m hoffmann and p hurtgen ( 2016 ) : inflation expectations, disagreement and monetary policy. economic letters ( 2016 ), vol. 146 : 59 – 63. 5 g eggertsson and m woodford ( 2003 ) : the zero bound on short - term interest rates and optimal monetary policy. brookings papers on economic activity, 1 : 139 –

##ity provision would in fact mean : for the imf, unlike central banks, cannot itself create liquidity. consequently, the national central banks of countries whose currencies are part of the basket of special drawing rights would be required to provide liquidity, whatever the amount. 3. conclusion ladies and gentlemen, the financial and debt crisis is, unfortunately, far from over. this was made abundantly clear again this summer. i have deliberately disregarded current actions to cope with the crisis, focussing instead on lessons from the crisis and casting a sceptical eye on some aspects of the global reform agenda. let it be understood that the bundesbank certainly does not reject this agenda, since it addresses the areas that need to be addressed ; moreover, reforms are crucial to establishing more solid foundations for the global economy. however, it is important to avoid measures which hamper or prevent market - economy processes without recognisably reinforcing stability. blind faith in the market lost its appeal, at the latest, with the onset of the crisis. yet this does not mean that statism and government control are the right answers to the crisis. the cost of attempts to achieve politically desirable market results and structures is likely to be high – indeed, too high. the prime objective of the global reforms ought to be to identify weaknesses in the existing regulatory framework and to adjust the framework accordingly. in this admittedly often lengthy and arduous process, the bundesbank sees itself in the role of committed advocate and constructive admonisher. thank you very much for your attention. i wish you an enjoyable evening at the deutsche bundesbank ’ s reception here at the goethe university in frankfurt. bis central bankers ’ speeches