The Governor of the National Bank of Romania (BNR), Mugur Isarescu received Tuesday, May 22, the title of Doctor Honoris Causa of the ‘Andrei Saguna’ University of Constanta, the Jubilee Diploma and the Homage Medal ‘Saint Hierarch Andrei Saguna’ on the occasion of the 20th anniversary of the institution, HotNews.ro reports.Isarescu also attended the festive course organised for this year’s graduates. In the context, the BNR official added: “I strongly believe that school, learning, research and patience are the strongest arguments against the invasion of underdevelopment and all kind of crises.”The governor’s dissertation, specifically prepared for this event, referred to the post-crisis monetary policy, whose rules have radically changed. “Before crisis, inflation was the most important component of stability and everything was alright, as long as central banks controlled the increase of prices. Plus, everybody agreed that markets have the capacity to regulate and correct themselves,” Isarescu said.“As they say, draught is bad, and everybody waits for rain to come, but when it comes, everybody fears floods,” he went on. “The massive flow of euros led to a strong appreciation of the RON and, had we not intervened, it would have reached a parity of 2-2.5 RON/EUR. During the 2006-2008 interval we purchased between 10 and 12 billion EUR, we tripled the money supply and inflation obviously increased. (…) The crisis came in an environment characterised by low inflation levels, demonstrating that the stability of prices does not also guarantee the financial stability,” he added.According to the governor, mopping-up the consequences of the crisis proves much costlier than the intervention of authorities meant to limit or correct the imbalances, in an early phase. The measure taken by the central bank before crisis include promoting a flexible exchange rate, adopting the strategy of targeting the inflation, completely liberalising the capital account, along with increasing the cash reserves of banks for their liabilities in RON (20 pc) and foreign currency (40 pc).