, 60314 frankfurt am main, germany tel. : + 49 69 1344 7455, e - mail : media @ ecb. europa. eu website : www. ecb. europa. eu reproduction is permitted provided that the source is acknowledged. media contacts related topics central banking governance central bank independence banking supervision disclaimer please note that related topic tags are currently available for speeches and introductory statements to the press conferences ( with q & a ) from 2018 - 19 only. copyright 2019, european central bank

rate instrument. as a consequence, communicating exit strategies is more complex than in previous tightening cycles. at the ecb, the exit is made easier by the policy instruments used. security holdings of the smp will be held until maturity. excess liquidity is sterilised with reverse operations. banks can pay back long term loans before maturity as market conditions normalise. at the same time, the ecb remains ready to act if conditions deteriorate. the new role of central banks in preserving financial stability is another challenge. following the crisis, the prevailing view suggested to as - sign new powers to central banks, in the form of stronger involvement in bank supervision and macro - prudential policies. some observers argue that conflicts between financial stability functions and the primary goal of preserving price stability might emerge. to safeguard the credibility of the monetary policy function and of the supervisory function we will adopt a governance structure that strictly separates the two. and the hierarchy of goals is clearly set and communicated at the ecb : our primary objective is and will remain price stability. for example, a central bank might find itself in a difficult situation if an interest rate hike necessary to avert risks to price stability would at the same time impact adversely on some banks. allegedly, this could undermine the credibility of the central bank. in this context, communicating clearly and designing appropriate institutional frameworks is crucial. we in europe are very much aware of these challenges. at ecb, the preparation of the single supervisory mechanism ( ssm ) is progressing. the asset quality review of banks to be carried out before the ssm becomes operational will ensure that “ hot potatoes ” will not be handed over to the ssm. to complement the institutional architecture, we also need a strong commitment towards an effective single resolution mechanism, along with efficient and credible backstops. the latter two elements are a necessary complement to the ssm and will ultimately increase its credibility. bis central bankers ’ speeches finally, threats to credibility and independence might also make the job of central bankers more difficult. central banks have fulfilled their man - dates and proven successful through their measures and interventions. as a result of the earned credibility, politicians and the general public have now higher expectations as to central banks ’ ability to manage crisis and the economy. this might overburden central banks and make them more involved in sensitive areas. the new challenges and complexities of today ’ s environment make clear that communication strategies will play an increasingly important role in the dialogue between central banks and markets