ABSTRACT
Looking back, economic historians will probably consider the early 1980s a defining moment. It was then that central bankers started in earnest their successful fight against the Great Inflation of the postwar era. Since then, another concern, financial instability, has been gaining ground and risen to the top of national and international policy agendas. There is much that we have learnt since that defining moment about how to make pro-
gress on these two fronts. Price stability, in the form of low and stable inflation across much of the world, has been achieved and there is a broad consensus about how to preserve it. While financial stability has remained more elusive, by now we all know that one key to success is strengthening the financial infrastructure. Ever since the Asian crisis, the international community has made major efforts to develop the outline of a comprehensive approach to achieving this goal, articulated through a number of codes and standards. The Basel-based community, not least through the Basel Committee on Banking Supervision, has played a prominent role here. Likewise, countries have made major efforts to implement those codes and standards.2
