Central bank credibility vital, says ECB's Issing

Speaking to the annual meeting of the Allied Social Science Associations, European Central Bank's chief economist Otmar Issing said interest-rate policy can only control inflation in the "medium to longer term," and that consistent policy was needed to establish credibility.

Issing told the meeting it was important for a central bank to offer enough information about its policymaking process to provide an element of predictability about its likely actions.

"If a central bank is reliable in this