we are now asking ourselves what the next – hopefully stable – phase will be like. in the academic and political discussion on future monetary policy, these questions include : what monetary policy strategies will be employed? which monetary policy instruments will be used? and what will monetary transmission look like in the various currency areas? that said, one thing is clear : monetary policy cannot ignore long - term changes in the underlying conditions. the new world will definitely not be the same as the old one. the circumstances surrounding monetary policy – such as the structure of the financial system and banks ’ business models – have changed. the key questions here are : in what way and to what extent? discussion of the post - crisis setting in monetary policy must be accompanied by an analysis of market conditions. if we wish to be able to steer monetary policy effectively and efficiently, then we may need to respond to the new state of affairs in an appropriate way. in this context, however, we must bear in mind that this state of affairs also shows the influence of monetary policy. central banks certainly do not want to shape the financial system according to their own inclinations. that should be left to market forces and policy makers. instead, the financial system is the channel through which monetary policy signals and impulses are transmitted to the real economy in order to achieve our goal of price stability. that is why monetary policy is, above all, dependant on the functional viability of the financial markets. “ work in progress ” – determining the “ new normal ” as the bundesbank executive board member responsible for markets, i would now like to draw your attention to several areas where the financial markets have witnessed change and are thus leaving their mark on the “ new normal ” : notably, money market activity, the market muscle - power of new players, fragmentation in our monetary union, the implementation of digital changes, and modifications arising from regulations. that topic, incidentally, will be discussed in more detail by jens weidmann in his speech tomorrow at the european banking congress. let ’ s look first at the money market. the 2007 financial crisis caused the traditional money market to dry up, effectively rendering it dysfunctional. since then, we have seen heightened risk aversion. banks hold larger liquidity buffers and are less keen to source liquidity from the market. interbank turnover has dwindled considerably in the unsecured segment and the emphasis has shifted significantly from unsecured to secured money market funds. step by step,

##t the assessment of current economic activity relative to its long - run trend. second, thomas knetsch has analysed the importance of inventory investment for german business cycles. he finds that preliminary national accounts data of inventory investment are generally of poor quality. in another paper, he discusses how additional real - time information, in particular data from the ifo business survey, can be used to improve upon the preliminary official figures on the current level of inventories ( discussion paper nine and 10 / 2004 ). third, christina gerberding, franz seitz and andreas worms have used the real - time data set to re - examine the existing “ evidence ” that the bundesbank ’ s monetary policy can well be captured by a standard taylor rule. as you know, clarida, gali and gertler claimed to have shown that the bundesbank did not pursue a strategy of monetary targeting but in effect followed a forward - looking variant of the taylor rule. i do not wish to anticipate the discussion at our conference. but i ’ m sure that we will hear some new arguments about monetary policy in germany in the past. for instance, gerberding, seitz and worms will present evidence that the bundesbank did respond to deviations of real - time measures of money growth, expected inflation and output growth from their respective targets. in my view, the debate about the bundesbank ’ s monetary policy directly leads to the “ ex ante ” aspects of data uncertainty, and thus to the following question : how should central bankers deal with measurement problems and other forms of data uncertainty during the decision - making process? i ’ d like to make four short remarks on that question. first of all, it seems fairly uncontroversial to me that concern about data uncertainty provides an additional and important argument against fine - tuning the economy with monetary policy instruments. we have to take into account that data on current output are exposed to considerable uncertainty. on top of that, it is even more difficult to estimate potential output. hence, every attempt to fine - tune the economy bears the risk of policy errors with the corresponding negative effects on price stability. in my view, and that ’ s my second point, the more recent research on data uncertainty supports the principle of a cautious monetary policy approach ( “ steady as she goes policy ” ). as we know that important data on the economic situation are subject to revision, it generally can make sense to wait for newer, and