and monetary policy transmission. this link we still have to better research. that public policies at international, but also national level are all intertwined. national policies – macroeconomic and fiscal policies – can have a systemic effect on the whole euro area. it took this crisis to really understand this. and the euro countries need to prove now that it can work, that we can make policies consistent and can recover trust and confidence. the euro countries took the necessary steps to pave the way put of the crisis. as a central bank we have made our contribution to overcome the deep recession we experienced only 2 years ago, contributing to bring back trust and confidence. now it ’ s time to address new challenges : first, governments have to work on regaining confidence, putting the necessary reforms in place second, the regulatory reform which is on its way has to be fully implemented and third, the unwinding of our non - standard monetary policy measures has to go forward as financial conditions improve, not least to prevent moral hazard and delay in the needed financial sector restructuring we should not forget that the european monetary union came a long way. the werner report 40 years ago, the establishment of the european monetary system 30 years ago, the delors report 20 years ago and finally the establishment of the european monetary union a bit more that 10 years ago. we must not undermine this great achievement. the serious currency turmoil and fluctuations in the 50 years preceding the european monetary union, notably the exchange rate shocks in the 1980s and the crisis at the beginning of the 90s should be a reminder how precious the current achievement of a monetary union is. like with financial integration, i believe that the european monetary union and more integration and consistency of public policies on a european level is a fact, a necessity and an irreversible process. what we need to ensure are sound and sustainable policies for an ongoing success. i thank you for your attention. bis central bankers ’ speeches

go hand in hand. indeed we have witnessed that in a financially integrated market risks can spread and spillover to other segments of the financial market, increasing the likelihood of contagion of financial fragilities and systemic risks. so has this recent experience changed our view about the benefits of financial integration? not at all! it is true that the cause of the financial crisis has many dimensions – which we still need to study carefully. but a key issue has been loose regulation and supervision, opaqueness of financial products and practices, massive mispricing of risk and a distorted allocation of resources. in my view, financial integration remains not only a fact and necessity of today ’ s financial markets, but an irreversible process, a process that we do not wish to reverse. instead, we need a more resilient financial sector! bis central bankers ’ speeches for this, we need financial integration and sound policies guarding our markets. only with appropriate policies, the benefits of financial integration can outweigh its potential risks. first and foremost, we need to strengthen financial market regulation and supervision. and when i say strengthen, i do not only mean stricter rules, greater buffers and better risk management, but also : that regulation and supervision is uniformly applied. that banks ’ business models and corporate governance become sustainable [, internalizing the costs of their risk taking and potential failure ] that financial market activities become more transparent with respect to financial innovations, practices and risk assessments and that the soundness of the system as a whole has to be ensured. more the systemic dimension of financial market actors ’ – but also governments ’ – actions was not sufficiently recognized before the crisis. traditional banking supervision was designed to look at individual institutions ’ risks in isolation. today, we know better. and a lot of progress has been made in this regard. in europe, we have established the european systemic risk board ( esrb ) and three pan european supervisory authorities. and similar institutions were setup across the atlantic in the us. i often hear and i am often asked : is it because we have the euro? we cannot make our common currency responsible for issues caused by market failure, lack of regulation and supervision and undisciplined fiscal expenditure. i am convinced that maintaining price stability is the best contribution a central bank can make for macroeconomic, but also financial stability. however, we also have seen that price stability may be a necessary condition for financial stability but not a sufficient one. moreover, we have seen that