its medium term objective. through countering fragmentation omts aim to preserve the singleness of monetary policy and to ensure the proper transmission of our monetary policy stance to the real economy throughout the euro area. this falls clearly and squarely within our mandate. some critics have argued that because of our determined policy action, the shoring up of bank capital and the consolidation of fiscal positions have been delayed. my answer is simple. our measures gave breathing space from markets driven by panic, which were forcing the economy into a position where inappropriately high interest rates would make default a self - fulfilling prophecy. adjustment would have been impossible. instead of better capitalised banks and stronger fiscal positions we would have been left with financial and economic meltdown. today we are seeing some encouraging signs of tangible improvements in financial conditions. spreads in sovereign and corporate debt markets have narrowed considerably. banks in stressed countries have seen the deposits placed with them by euro area non - banks increasing by about 200 billion euro since august 2012. target2 balances – the large intra - central bank positions that had accumulated due to the malfunctioning of financial markets – of the national central banks in these countries have declined by about 250 billion euros or 25 % since their peak. recourse to borrowing from the eurosystem has also abated. we have, therefore, started observing convincing signs that fragmentation on the funding side for banks has decreased greatly. and although bank lending to businesses and households remains anaemic, we are now seeing some signs of slight improvement on the lending side as well, as our regular surveillance of bank lending conditions and access to finance shows. these improvements are in no small part due to the fact that unwarranted tail risks of a systemic collapse of the monetary union that were being priced - in by markets have now been largely removed. we can, therefore, safely say that our economic and monetary union ( emu ) is a more stable union today than it was a year ago. and the markets are fully confident that the euro is a strong and stable currency. to give you an example, the volume of international trade invoices denominated in euro is second only to those denominated in us dollars. the responsibility of national governments however, economic conditions in the euro area remain challenging. real gdp contracted again in the first quarter of 2013. output has therefore declined for six consecutive quarters. labour market conditions remain weak. to maintain and expand the productive capacity of our societies, national governments need to improve

roger w ferguson, jr : economics and ethical behaviors remarks by mr roger w ferguson, jr, vice - chairman of the board of governors of the us federal reserve system, on the occasion of his acceptance of the 2004 distinguished alumni award, sidwell friends school, washington, dc, 22 may 2004. * * * i am pleased to be here today and honored to accept the sidwell friends school distinguished alumni award for 2004. it is awe - inspiring to be included in the company of so many accomplished graduates, including walter gilbert, hanna holborn gray, antonio casas, helen colson, and bill nye. all of you, as sidwell friends graduates and friends, clearly understand the value of a good education. indeed, economists have long noted an “ education premium ” in compensation, with college - educated workers earning approximately fifty percent more than workers with no more than a high school education. 1 however, you also know that a good education is more than just the classroom - based learning of facts, or even the skill of critical thinking. a truly outstanding education also encourages moral behaviors and appropriate decisions. sidwell friends, with its grounding in quaker traditions, certainly values the moral and ethical development of its students. fortunately, many schools teach the importance of choosing the “ hard right over the easy wrong. ” that is where i will focus my brief remarks. from my perspective as a policymaker, i want to commend the emphasis on a complete education, with technical, critical thinking, and ethical components, and encourage you and other schools to, if anything, redouble your efforts to instill moral values and ethical behaviors. obviously, we as sidwell graduates hope to exemplify those values as much as possible in our personal and professional dealings. similarly, i encourage the current generation of students to take advantage of the moral and ethical training available at these schools. do not forsake a solid grounding in those topics that will help you to do “ good ” while you are learning the skills required to do “ well. ” some of you may have noticed that i encouraged this focus on teaching and practicing ethical and cooperative behaviors as an economic policy maker. in that role, shouldn ’ t i encourage you to be only a coolly self - centered, utility - maximizing, homo economicus? the answer is no. economic outcomes are improved when market participants “ play by the rules. ” this fact has a strong grounding in economic theory and empirical research.