The crisis triggered a change in the broad environment in which central banks operate 1/3  BIS central bankers' speeches  and thereby also necessitated a continued evolution of the role and governance of our institutions. Concerns were raised regarding the ability of central banks to prevent and manage financial crises. This provoked a discussion of central banks’ role in safeguarding financial stability. Ultimately, there was recognition of the need to reconsider or adjust the central banks’ responsibilities related to financial stability. A major policy response since the global crisis was the enhancement of macroprudential policy framework and the assignment of additional responsibilities to central banks in the fields of financial stability. Then central banks developed tools for the practical implementation of the macroprudential framework. Understanding the financial cycle The new policy framework and tools, however, can only be as good as the capability to “diagnose” when their application is needed. They have limited value, if any, for the purpose of safeguarding financial stability unless the macroprudential authority can detect the accumulation of cyclical systemic risk in the financial system. In other words, achieving the financial stability objective through macroprudential measures cannot be sustainable without understanding the financial cycle. That is why we have considered this to be a topical issue to devote our anniversary conference to. There is no single generally accepted theoretical basis, nor a dominant method, for measuring the financial cycle. Thus the role of research becomes significant for policymaking.

That is why today’s conference is conceived to bring together academic research and central bank practice. The conference structure reflects an understanding that the global financial cycle affects the euro area and its monetary policy, which in turn affects the financial cycle in Europe beyond the euro area. Therefore, the first session of the conference is on the current phase of the global financial cycle which is to a large extent driven by the US monetary policy. We recall from the 2007/2008 crisis how the financial disruptions originated and triggered a full-scale global crisis. The second session is focused on the euro area financial cycle, as influenced by the global financial cycle, and its implications for asset prices and financial stability. Since the ECB policies also shape the financial cycle in Europe outside the euro area through economic and financial channels, although divergences do exist, our third session is devoted to the financial cycle in the non-euro area EU member states. By way of example from Bulgaria, the BNB recent research and relevant estimates for the local financial cycle indeed show that we are currently in the upward phase of accumulation of cyclical risk. We have, correspondingly, decided to activate and then raised the rate of our countercyclical capital buffer. Turning to actual policy reactions in dealing with financial cycles, our conference ends with a panel where Governors will share with us their views. Dear colleagues and guests, In conclusion, let me sum up my main points.