1. as regards liquidity management first, it should be emphasized that close cooperation between central banks, and notably between the ecb and the fed has been crucial for dampening the effects of the protracted confidence crisis that has frozen up international money markets. our coordinated actions with the fed and other major central banks, notably to provide euro area resident banks with us dollars under swap agreements with the fed, have clearly demonstrated our determination to act collectively to restore normal liquidity conditions in the interbank markets. enhancing swift and complete information exchanges between central banks, and also between central banks and supervisors is certainly a continuing priority. i have to say that the french model of bank supervision, where the supervisors are inside the central bank, has shown once more its advantages in the current context. 2. as regards monetary policy, i want to stress that even a flexible policy – as inspired by risk management considerations a la miskin – can only be implemented if needed when inflation expectations remain appropriately anchored to the central bank ’ s objective. in other words, a solid anchoring of inflation expectations remains a prerequisite for rate cuts in times of heightened financial uncertainty and downside risks to growth. i am convinced that in times of financial trouble it is all the more necessary to insure price stability. in that respect, the diagnosis regarding the state of inflation expectations is thus decisive in the current juncture. usual market - based indicators such as break even inflation rates ( beirs ) are reliable indicators of long term inflation expectations 4 ; however, such market - based indicators may be plagued by unusually large risk or liquidity premia during a period of financial turmoil, which means that we have to be very cautious in our assessment. more concretely, this implies that the plummeting real rates and tighter beirs on some market ( see for example the market for french indexed debt over the last few cf. for instance coffinet and frappa ( 2008 ) at the banque de france, and beechey, johannen and levin ( 2008 ) at the board of the us federal reserve. weeks ) may well be partly explained by such technical factors and not reflect any marked deterioration in the outlook for inflation. but we should obviously remain especially cautious in order to keep expectations firmly anchored. 3. last but not least, we should keep in mind that central banks, either viewed as the monetary policy - makers or as the lenders of last resort, cannot and should not be held responsible for everything. in my view, regulatory

to the favourable fact that the slope of the yield curve has remained positive. 3 / our forward guidance provides further indications as to the future path of our monetary policy ; and by steering expectations, it has an impact on the yield curve. our forward guidance is clear as to the sequencing : “ we expect [ the key ecb interest rates ] to remain at their present levels for an extended period of time, and well past the horizon of our net asset purchases. ” there is no doubt within the governing council about this sequencing. in all events, we should not consider raising interest rates until we have reached a sustained adjustment in the path of inflation. 4 / the fourth instrument is the provision of liquidity to financial institutions. in october 2008, we introduced the fixed - rate full allotment policy in all our regular refinancing operations. it was designed in order to guarantee banks ’ access to liquidity – and this policy is still active today, for both 1 - week or 3 - month operations. the maturity of this liquidity provision was then extended with the launch of 3 - year long - term refinancing operations ( ltros ) and, later, targeted longerterm refinancing operations ( tltros ). the latest series of tltros provided banks with up to 4year funding at attractive rates – as low as – 0. 4 % – in order to further ease financing conditions. in september 2017, a total of eur 760 billion is still lent to euro area banks through tltros, which is substantial, over 7 % of euro area gdp. before i conclude, let me add a few words on the recent evolution of the euro. a number of factors play a role ; monetary policy is only one of them. the sharp appreciation of the euro has notably been stemming from the significant reappraisal of growth prospects for the euro area, as well as from the geopolitical context. the impact of the strong euro on growth is currently offset by the strength of domestic demand in the euro area ; but the recent appreciation of the euro exchange rate has led us to revise down slightly the outlook for inflation. let me recall that the exchange rate of the euro is not a policy target of the ecb. but the exchange rate remains an element that we closely monitor owing to its possible implications for the medium - term outlook for inflation. i would like to finish by insisting on one word : confidence, but confidence without complacency.