fragmentation. second, climate change and the necessary decarbonisation of the economy will require far - reaching adjustments. macroeconomic developments are therefore highly uncertain. here, we can learn from history. the period of high inflation in the 1970s was also accompanied by geopolitical turmoil and energy supply challenges. with hindsight, we can now see that unanchored inflation expectations were a key reason why inflation remained so persistently high at that time. 4 some important lessons from that period are : don't let inflation expectations become unanchored, don't shy away from a strong monetary policy response and don't ease up too soon. however, geopolitical and thus also geo - economic fragmentation could also cause a lasting increase in price pressures. for example, uk economist charles goodhart suspects that globalisation – above all, china's integration into the global economy – has been an important factor in the low inflation rates of recent decades. 5 economic fragmentation could therefore increase price pressures over an extended period of time. and a lasting increase in price pressures would also require a lasting tightening of monetary policy. overall, however, empirical evidence for the impact of globalisation on inflation is mixed. 6 above all, the extent of this effect is subject to dispute and difficult to distinguish from other factors. for example, the subdued inflation dynamics since the early 1990s could also have resulted from the increasing stability orientation of monetary policy in many 3 / 4 bis - central bankers'speeches countries. that would, of course, be good news for us ; price stability could then be achieved with less effort. but i will not count on it. in these complex circumstances, i am wary of declaring a new era of high interest rates. 6 closing remarks ladies and gentlemen, it is only human to zone in on the latest news when assessing a situation. it is easy to overemphasise the present. in behavioural economics, this effect is called recency bias. i think a prime example of this is the economist article i mentioned at the beginning of my speech, which assumed there would be zero interest rates forever. one thing is clear : the era of zero interest rates is over for now. but the truth is also that we don't know what the future holds or what circumstances we will face in a few years'time. what we do know, however, is that monetary policy will do what is needed to overcome high inflation. it is important for banks and other financial market players to be prepared

parliaments have given their consent. secondly : the mandate of the independent central bank must be unambiguous. political value judgements among various competing aims may be made only by those who have acquired direct democratic legitimacy as a result of elections. it is precisely for that purpose that elections give a mandate. the decision - making body of an independent central bank, which is not elected directly, may not make any autonomous value judgements among various competing aims. an overriding objective has to be specified in advance. that is precisely what the maastricht treaty does. it specifies the primary objective of price stability. hence, the independent central bank remains anchored in the democratic structure of the state. in my view, the limitedness of the central bank ’ s mandate is thus a corollary of its political, democratic and constitutional legitimacy. for that reason alone, i believe that broadening the mandate would lead to problems for the european system of central banks. that applies, for example, to the idea of extending the scope of the central bank ’ s mandate beyond price stability to include growth and full employment as additional objectives. that is quite apart from the fact that i do not perceive any trade - off between those aims — at least in the longer term. assigning other tasks can also cause difficulties for an independent central bank, however. assigning sole responsibility for banking supervision or a lender - of - last - resort function, for instance, may give rise to difficulties. such a plurality of mandates might give rise to a situation in which the independent ecb has to choose among different objectives, say between the objective of stable prices, on the one hand, and the consolidation of individual financial institutions, on the other. fundamentally, that would be a political value judgement. therefore, caution — at least — should be exercised in terms of delegating additional tasks to the ecb. in addition to those two basic preconditions — the democratic assignment of tasks and an unambiguous mandate — tying the independent central bank into a democratic system naturally requires something more : it calls for transparency and accountability. independent monetary policy cannot and must not be remote from the general public. in saying that, it is essential to distinguish precisely what is meant by transparency. does transparency mean full disclosure of the deliberations, arguments and motives behind a decision : in other words, transparency of the situation in which a decision is taken? or does transparency principally aim at disclosure of the process by which is a