the two elements taken together – the stylised fact and what we know about the deep economic structure – pose a puzzle. i will then offer the key to solving the puzzle. take the simplest measure of economic performance, the mean and the standard deviation of annual cpi inflation and of a conventional measure of detrended output for the euro area, the united states and several other countries over the period following the start of economic and monetary union ( emu ). plot these statistics in the same chart and treat this simple picture as a representation of the facts. [ figure 1 does this in the form of a scatter - plot. 1 in for the euro area, inflation has been computed on the basis of the hicp. for all economies, the detrended measure of output is the hodrick - prescott - filtered logarithm of real gdp. with the exception of the euro area, the united states and the united kingdom – for which data are from their respective national statistical order to make the comparison meaningful, take detrended output, which in the short - tomedium term reflects output movements over and above the low - frequency variation that is beyond the control of monetary policy. if you compare means and standard deviations across countries, several interesting aspects emerge from the chart. figure 1. inflation and de - trended output : means and volatilities since january 1999 source : ecb calculations first, and almost en passant, you are led to confirm a fundamental economic principle which is a cornerstone of our monetary framework : higher inflation is not automatically associated with a superior economic performance. comparing means – of inflation and detrended output – across countries you can find simply no connection between average inflation and average macroeconomic performance, even at business cycle frequencies. as a simple corollary, higher inflation merely imposes additional costs on the economy, costs which it is my precise duty to spare euro area businesses and consumers. 2 but it is by comparing volatilities in the right - hand panel that you would be most surprised. in terms of volatility, the euro area exhibits a remarkable comparative performance for what concerns both inflation and detrended output. emu has kept inflation in the vicinity of levels consistent with our objective, without this having caused abnormal swings in business conditions. when seen from an international perspective, real activity in the euro area – in its deviation from trend – has been remarkably in line with that seen in other countries, but with a crucial difference : euro

to ensure that the educational foundations for professionals employed in the industry are preparing them adequately for their roles. the involvement of industry practitioners on the various accreditation committees and panels of the faa provides that essential link to close the gaps between what the industry needs, and the training programs being offered. it also provides a platform for practitioners and training providers to engage on the future needs of the industry and the ways in which these needs can be met through professional education and training. if the talent requirements of the financial sector are to be effectively addressed and managed, the industry cannot be a spectator. it is acknowledged that there are already many practitioners who are already serving on the accreditation technical committees and the board of faa from different parts of the world, who have committed their valuable time, experience and knowledge to this important initiative. these will be important contributions as the industry continues to develop and mature. on that note, let me once again congratulate the board and management of faa on this occasion of its official launch. bank negara malaysia together with the securities commission fully supports the faa in its important role. i am confident that the faa will have a significant impact in the efforts to sustain a strong talent pipeline for the financial sector in this more dynamic and challenging environment ahead. bis central bankers ’ speeches