% over the medium term for the euro area as a whole. in my contribution today, i will emphasise that the ecb conducts monetary policy “ as usual ”. in particular, after briefly recalling the motives for our april interest rate increase, i shall elaborate on how the ecb deals with the particular challenges prevailing, namely • inflation pressures stemming from commodity prices • costs of keeping interest rates low for too long • the adjustment to the monetary policy stance with some non - standard measures still in place, and • divergent macroeconomic and financial developments in the countries of the euro area. further elaborations on this theme can be found in my intervention “ the new normal ” at the 13th euro finance week, frankfurt, 16 november 2010. bis central bankers ’ speeches 2. commodity prices and the outlook for price stability on 7 april we increased our key interest rates by 25 basis points. this decision was the first policy move since may 2009. it was mainly driven by upside risks to price stability, in particular relating to further increases in energy and commodity prices. continued upward pressure on overall inflation is discernible in the early stages of the production process. it has the potential to translate into inflation expectations, broad based second - round effects in price and wage - setting and inflationary pressures over the medium term. as mentioned, we continue to see upside risks to price stability. signals from the monetary analysis indicate that the underlying pace of monetary expansion is gradually recovering. at the same time monetary liquidity remains ample. it could accommodate upward price pressures. bis central bankers ’ speeches in addition, strong economic growth in emerging markets likely contributes further to commodity price rises. ample liquidity at the global level could support this development. the monetary policy stance of many central banks around the world also remains very accommodative. this creates an environment which is raising inflationary challenges, in particular for emerging economies that shadow us monetary policy. bis central bankers ’ speeches is the fact that inflation is being driven mainly by commodity prices not a reason to be less concerned about inflation in the medium term, as these such developments are usually temporary only? theoretically, it is possible to look beyond the volatility in inflation triggered by first - round effects of commodity price changes if these are of a purely temporary nature. however, the central bank also needs to consider policy action in case sustained upward trends in commodity prices are seen as a risk to price stability over the medium term. we have already observed in the past that commodity prices

the national central banks of the euro area, the bank of england and the centre for economic policy research. its purpose is to achieve a better understanding of the euro area business cycle by fostering empirical analyses on this issue. the ecb is also a contributor to the centre for economic policy research and a number of other research activities carried outside the bank. to conclude, i strongly believe that central banks need top - quality research on monetary and financial economics. although general research of an academic nature might be better - suited for universities and research institutes, there is still scope for central bank economists to conduct research that is relevant for the conduct of monetary policy and for the other functions and tasks of a central bank. i thank you for your attention.