, the mispricing of assets and risks was not confined to the u. s. subprime mortgage market. many credit risk spreads across the globe were at historic lows in the period before the crisis, after several decades of mostly mild, infrequent recessions in the industrial economies. the broad incidence of narrow spreads in part reflected the activities of investors and intermediaries who were facing the same perceived incentives in many different markets. and asset prices – especially real estate prices – were unsustainably high in a number of countries. liquidity risk had also been mispriced. investors had paid insufficient attention to the maturity mismatch present in a number of investment vehicles, including abcp conduits and money funds. and both investors and intermediaries had assumed that the exceptionally liquid conditions in many markets of the pre - crisis period were a permanent part of the financial landscape. again, with hindsight, we can see that these vehicles were vulnerable to runs once the crisis hit, and these runs did not stop at national borders. michael gibson of the board's staff contributed to these remarks. the views expressed are my own and not necessarily those of other members of the board of governors. moreover, even countries where assets weren't obviously mispriced felt the effects of the growing dislocations when global banks were forced to deleverage and conserve liquidity. their pullback from lending was broad - based and eventually affected many emerging market economies. and the adverse feedback loop between world financial markets and the real economy was exacerbated by the greater global integration of markets for goods and services. trade and industrial output plunged everywhere as consumers and businesses pulled back from spending. notably, although financial institutions in some countries seemed to be more resilient to the growing turmoil than in other countries, all were affected to a degree, and no particular type of regulatory or supervisory system proved itself clearly superior to other designs – either in the buildup or the crisis - response phase. problems afflicted both the fragmented system of the united states and the unified systems of other countries. they cropped up where the central bank was deeply involved in regulation and where it played only a consultative role. and it occurred both in systems that were principles - based and those that had thick rule books. clearly, the deficiencies in both private behavior and public oversight were widespread, and both needed to be addressed. the response to the crisis was global given the global factors

christian noyer : current policy debate challenges – a euro area perspective welcome address by mr christian noyer, governor of the bank of france and chairman of the board of directors of the bank for international settlements, at the 4th bank of francedeutsche bundesbank macroeconomics and finance conference, paris, 24 may 2013. * * * ladies and gentlemen, dear colleagues, it is a great pleasure for me to speak in front of such a distinguished audience. as you might know, this is the fourth time that the banque de france and the deutsche bundesbank have jointly organised a conference of this type. it is held every other year, alternately in germany and in france. the fact that these two institutions sponsor an event of this nature sends a clear signal to the community of researchers : it illustrates the importance of research for the conduct of monetary policy. this is especially relevant at the current juncture as our understanding of the interactions between financial markets and the real economy remains incomplete. the work of outstanding quality presented during this conference could help influence the design and the conduct of monetary policy. the programme of this conference is very rich. it covers topical subjects that are of the utmost importance from the point of view of current policy debate. let me take as an example the topic covered this morning : unconventional monetary policy, which have been my bread and butter as a member of the ecb governing council for the already six years. after the lehman collapse, central banks implemented far - reaching unconventional monetary policy measures, first by setting up liquidity facilities and then, for some of them, by undertaking large - scale asset purchase programmes. measuring the propagation of these policies on our economy is a challenge. unconventional policies are typically announced in order to respond to specific economic and financial conditions. they are endogenous. and disentangling their effects from those induced by other economic and financial factors can be very difficult. empirical studies of the effects non - conventional policies, including pioneering studies by anne vissing - jorgensen, have proceeded through so called “ event studies ”. this approach consists of measuring the response of asset prices the day when a given measure is announced. the “ identification ” problem is solved in the sense that reactions by interest rates and asset prices on the day when a central bank announced a new non - conventional measure are indeed very likely to the caused by the announcement. this literature has for instance showed that the effects of the so called large scale asset purchase programs of the federal reserve. “ q