excessive lending. but if monetary policy instruments cannot always simultaneously satisfy financial stability aspects, then there is only one conclusion : we must consistently apply the tinbergen rule ; we need at least as many instruments as we have goals to achieve. a different goal requires an additional tool that is appropriate and proportionate. this is where the ssm comes into play – more specifically, the relationship between macroprudential policy and monetary policy, the third side of the triangle. in principle, it should be easier, by expanding the toolkit which is available to the ecb, with the ssm to establish a clear separation of functions between the two policy areas. monetary policy should concentrate on price stability, which is an important variable throughout the euro area. the focus of macro - prudential policy should be on financial stability. particular emphasis could be put on specific regional or sectoral imbalances. however, there may be circumstances under which a clear separation is not so simple. this is the case when the financial cycle extends across sectors and countries and represents a threat to future price stability. a combination of monetary and macro - prudential measures could then be the right answer. particularly for the macro - prudential measures, there are many different questions and uncertainties about unintended spillover effects of regionally limited measures on other countries or the entire euro area. under such conditions, the fact that the ecb is also responsible for banking supervision will benefit monetary policy. because for all of these issues, the decision - making is concentrated in the governing council. the council ’ s role is to ensure an optimal policy mix. as for macro - prudential policy, the national authorities, as i have already said, still play an important shaping role. they have extensive knowledge of the national economic and financial systems. the governors of most of the national central banks are involved in national macro - prudential tasks. this will make the exchange of views and voting in the governing council in respect of national and european macro - prudential policies considerably easier. should opinions diverge – for example, in relation to the systemic consequences of a specific measure – the ecb is authorised under eu legislation to improve existing macro - prudential measures which have been implemented by national authorities or to make recommendations for new measures. summary ladies and gentlemen, allow me to summarise. see adrian, t. und h. - y. shin ( 2010 ), “ the changing nature of financial intermediation

a major impact on price stability, many economists have changed their minds and are demanding that central banks should take into account risks to financial stability in their decisions. the ecb has always included financial stability considerations in its monetary policy decisions. in our two - pillar strategy financial imbalances are an important element in deciding what measures are necessary, even when it is a matter of inflation that is too low. in particular, the monetary pillar captures the relationship between excessive credit and liquidity creation, and potential risks to future price developments, including that of a destabilising asset price boom. our actions have a deliberate medium - term orientation. this gives us a sufficiently long horizon to take account of financial imbalances in our strategy. elements of a “ leaning - against - the - wind ” approach are therefore implicitly included. however, should there be signs of financial imbalances emerging, we need to carefully consider whether the use of standard monetary policy instruments is appropriate as a response. there are two reasons for this. first, it could conflict with our mandate to preserve price stability. the bis estimates that the financial cycle typically lasts around 16 years, compared with eight years for the business cycle. this asynchrony can lead to periods in which inflation makes a rate cut necessary, while the financial data favour the opposite. if we take only the financial cycle into account, we may be forced, even with our medium - term orientation, to make compromises in terms of our price stability objective. according to our hierarchy of goals, which gives priority to monetary policy, this would not be permissible. in addition, there is also the question of which interest rate path should be followed to counter excessive credit growth. some studies conclude that in a highly leveraged boom bis central bankers ’ speeches even small changes in interest rates can have a strong impact. 3 other studies suggest, however, that rather large interest rate movements would be required to counteract the financial cycle, but these in turn would cause collateral damage to the economy and price stability. 4 using monetary policy instruments to strengthen financial stability seems to be too crude an approach in view of the heterogeneity in the euro area. so, for example, lending in the period before 2008 was ten percentage points higher in some subsequent crisis countries than in the non - crisis countries. a rate hike by the ecb, which always applies to the entire euro area, would have had too great an impact on those regions that were not affected by