bank ’ s narrow price stability objective, and not of other public policy goals. our non - standard measures have been designed in such a way that they cannot compensate for failures in other policy areas. they have made a crucial contribution to preserving the very favourable financing conditions that are supporting the economic upturn and the sustained adjustment in the inflation path towards our aim. the euro area economy, including the public sector, currently benefits from very low interest rates. it is important for everyone to realise that our monetary policy decisions are only guided by our price stability mandate. in the light of this, fiscal authorities and borrowers in the euro area should be long - sighted enough and plan sufficiently ahead to prepare themselves for the time when it will be appropriate for us to start a gradual process of policy normalisation. in using novel instruments to reach our goal, we have been mindful of the principle that, while “ instrument independence ” is critical for us to be able to deliver on our treaty mandate, it does not excuse us from basing our choices on the law and on economic effectiveness. in this respect, we have been striving for two other important public policy virtues, also famously highlighted by max weber : augenmaß und verantwortungsgefuhl ( which i would translate as prudence and sense of responsibility ). in designing our instruments, we implemented provisions and safeguards ensuring prudence. in deciding to act, in lieu of letting events march on, we took responsibility for our price stability mandate. by ensuring price stability, monetary policy creates one of the conditions for a thriving social market economy. monetary policy alone, however, cannot ensure prosperity. sound economic policies are indispensable to unlocking the sources of employment and growth in economic and monetary union. member states need to live up to their joint responsibility for the stability of the euro area and step up their efforts to conduct fiscal and economic policies in a way that supports the smooth functioning of monetary union. 1 see willem buiter ( 2016 ), “ dysfunctional central banking ; the end of independent central banks or a return to ‘ narrow central banking ’ – or both? ”, global economics view, citi research, 21 december ; otmar issing ( 2016 ), central banks – from overburdening to decline?, safe white paper series, no 42 ; jakob de haan and sylvester c. w. eijffinger ( 2017 ), central bank independence under threat?, cepr policy insight

jean - claude trichet : shaping the future of global financial market regulation transcript of a short video interview with mr jean - claude trichet, president of the european central bank, at the netherlands bank ’ s amsterdam financial forum 2009, amsterdam, 28 november 2009. * * * president trichet, we really appreciate your willingness to address the amsterdam financial forum. what would be your main messages for the financial forum? it is a great pleasure to address the financial forum that will discuss topical issues for the long - term stability of the financial system and for the economy as a whole. regrettably i cannot join you in person. by the time you see this video, i am on my way to china for our euro area - china dialogue. nevertheless, i would like to share with you some of my views on the ongoing regulatory reform agenda. i would like to pay tribute to the role of the basel committee and its chair, my colleague nout wellink. the basel committee is one of the major fora shaping the future of financial market regulation. i would like to highlight in particular the committee ’ s main priorities over the shortterm and the challenges it faces in the coming year. president trichet, what impact did the decisions of the g20 have on the work of the basel committee and its governance? the leadership of the g20 in determining the new financial regulatory framework has led to a strengthening of the basel committee and of its governance. the basel committee broadened its membership in june to include new representatives from the g20 countries as well as from hong kong and singapore. strengthening the governance of the basel committee was crucial to enhance the committee ’ s ability to carry out its core mission of improving global supervisory practices and standards. its new governance is expected to also contribute to the effective implementation of reforms, including in major emerging countries. what exactly is your role in the basel committee? i have the honour of chairing the oversight body of the basel committee. we have extended the membership to supervisory authorities and central banks of 27 countries. in september, we met in the new composition for the first time. this was, indeed, a very important and, i must say, challenging meeting given the issues at stake. i was very pleased that we reached agreement on a comprehensive set of priorities for the work of the basel committee in the short - term. these measures will constitute a major overhaul of the prudential framework and will improve the resilience of the financial system. in particular, we