there is clearly a need to provide european - level support to those euro area countries hit most by the crisis. this is not just a question of european solidarity, but also makes sense from an economic standpoint. mitigating the negative economic effects of the crisis in each member state and supporting the recovery afterwards makes the whole of europe stronger. the issuance of one - off “ coronabonds ” is one possibility. there are other instruments that could be used, like an eu rescue fund or measures involving the esm or the european investment bank. in the current crisis, the pepp is the right instrument to support the euro area on the monetary policy side. outright monetary transactions ( omts ) were designed to address a different contingency : the risk that the expectations of a euro area break - up might become self - fulfilling. omts remain an essential element of our policy toolkit, but they are not the most suitable instrument to counter the current crisis. 3 / 3 bis central bankers'speeches

different quality, gave the false impression that the benefits of diversification would reduce the risks inherent in the underlying assets. but the leverage embedded in those products meant that endinvestors were in fact exposed to a quantum of risk that could outstrip – rather than the accumulation of inventories may have sustained increasing spot prices from 2003 till the middle of 2007. yet the spot price has continued to rise since. the fall in inventories may of course simply be due to tighter fundamentals. mitigate – that implied by the underlying pool of assets. excessive leverage was the mechanism which – at some point – turned an efficient process of risk diffusion into a dangerous spiral of risk amplification and concentration. • third : stable institutions and firm monetary policy frameworks are needed more than ever in times of turbulence : financial stability is no substitute to price stability. the latter is a precondition to the former. as i said, a significant part of the decline in macroeconomic uncertainty is no windfall for modern societies : it is the fair and expected reward for institutional reform. in continental europe, this reform has been induced largely by the need to converge to sound macroeconomic policies as signalled, in particular, by the best macroeconomic regimes that were available in the continent. the process has been successful, both historically – comparing performances before and after monetary union [ figure 1b ] – and in cross - section. this figure [ figure 7 ] establishes a comparison between macroeconomic volatilities in the euro area and elsewhere since 1999 : a comprehensive cross section of international macroeconomic outcomes. despite recent shocks, the euro area countries have compressed aggregate risk relative to their past, and have done it beyond the standards that are set by other countries. stable and transparent monetary institutions have helped the economy before – remember the stock market collapse of the early years of this decade – and will help this time. • but – here suggestions for further reflection and analysis start – to what extent have stable macroeconomic frameworks genuinely squeezed risks out of the system? and to what extent have they encouraged over - confidence and complacency? we saw that complacency played a role in the under - pricing of risk in a certain market phase. but the remaining question is whether the relaxation in financial prudence could have been triggered by false expectations of a perennially smooth economic environment that policymakers could have avoided in words and deeds. • developments in financial markets have largely coincided with pressures on the real costs of commodities which – in