intra - euro - area trade. the euro was seen as the next logical step to complete the single market. emu was expected to serve as a catalyst for further economic reforms and political integration. who was right? after almost five years of emu one has to acknowledge that neither the positive nor the negative extremes have become true. however, the institutional framework currently faces a crucial stress test. the eurosystem ’ s monetary policy has managed to gain credibility and to build up confidence despite quite a number of challenges. this could not be taken for granted given the fact that there were no blueprints to fall back on. the centralised monetary policy and the decentralised but closely co - ordinated economic and budgetary policies constitute a rather demanding regime. the eurosystem at least has proved that it is up to the task. the ecb is endowed with an unambiguous mandate and has developed a strategy in accordance with the latest insights into monetary theory and practical experience. even the severe criticism of anglo - saxon economists and media has become less ardent recently. the monetary policy strategy is increasingly understood or at least better respected by market participants. long - term inflation expectations have been close to and mostly below the ecb definition of price stability of 2 %. the economic rationale behind the mandate and strategy is the generally accepted principle that price stability is the best contribution monetary policy can make to improving economic prospects and raising living standards. how this translates into a monetary policy strategy depends, of course, on the structural preconditions. it concerns the manner in which the complex transmission mechanism works its way through from monetary policy decisions to the economy in general and the price level in particular. a very important influencing factor in this respect is whether investment decisions are influenced more strongly by developments in long - term or in short - term interest rates. the two - pillar approach has proved to be the appropriate strategy for the euro area. it avoids creating unnecessary volatility in financial and real markets through its medium - term orientation, thus recognising that monetary policy does not have the instruments to fine - tune the economy. the prominent role of monetary growth acknowledges that money matters. this is by no means an outdated concept and is a lesson which i would like to stress considering the recent experiences of stock and housing market bubbles. and the track record? the ecb, together with the national central banks in the eurosystem, has delivered. it is fair to say that the credibility test has

, given the vital role that cdor plays in our financial system, canadian authorities judged it essential to examine cdor more closely in light of the new iosco principles and the experience with interest rate benchmarks elsewhere. strengthening the governance of cdor in 2012 – 13, as an initial step toward strengthening the governance of cdor, the investment industry regulatory organization of canada ( iiroc ) reviewed existing practices. the focus of this review was on the panel members ’ supervisory practices : specifically, how cdor submissions are calculated, who participates, who supervises, and who has regulatory jurisdiction. it was not intended to be an investigation into potential wrongdoing or manipulation of cdor. the iiroc review noted some inconsistencies in procedures among different institutions, and a failure in some cases to document those procedures. iiroc also identified a need to strengthen independent compliance oversight of rate setting to complement business supervision procedures and conflict - of - interest protocols within institutions. action is now underway, both by the official community and industry, to address the issues highlighted in the review. given that cdor is based on banks ’ issuance of bas, and with bank for international settlements, triennial central bank survey, “ statistical release, otc derivatives statistics at end - june 2013, ” november 2013. bis central bankers ’ speeches cdor submissions now coming entirely from banks rather than dealers, the relevant authorities have agreed that banks ’ cdor submission processes are most appropriately regulated by the banks ’ regulator, the office of the superintendent of financial institutions ( osfi ). accordingly, in january, osfi announced that, consistent with its mandate and expertise, it will supervise the effectiveness of governance and risk controls surrounding banks ’ cdor submission processes. 2 subsequently, in its recent budget, the federal government announced its intention to include a regulation - making authority in the bank act covering bank submissions to financial benchmarks. furthermore, the banks on the cdor panel should, fairly soon, release a submitters ’ code of conduct that they have developed in consultation with iiroc and the bank of canada. in addition to providing a formal definition of cdor and requirements for being a submitter, the code will specify minimum standards for submission methodology, internal oversight and records retention. work continues to strengthen other aspects of the governance of cdor to meet the principles established by iosco. for instance, we have discussed with industry the need for it to establish more formal administrative arrangements for cdor, and the industry