too low for too long may encourage excessive risktaking in some markets. this may spur the creation of asset bubbles and have repercussions on financial stability. we can see why monetary and macro - prudential policies need to be properly aligned. in striving for price stability, the ecb needs to keep an eye on the possible effects of currently deployed or planned macro - prudential policies. likewise, from a macro - prudential perspective, the current and expected future course of monetary policy needs to be taken into consideration. for this reason, we would support different institutional arrangements for macro - prudential decision - making within the ssm than those that are foreseen for micro - prudential. in the latter case we have always argued for a clear separation of functions between the ecb as monetary policy - maker and supervisor. for macro - prudential decision - making, however, we see it as important that the governing council is more closely involved. but beyond these considerations, one may ask, when the ssm is operational, what role should monetary policy play in financial stability directly? you will recall the discussion after the lehman failure about whether central banks should do more to “ lean against the wind ”. with a close - to - optimal macro - prudential framework in place, should monetary policy leave financial stability out of sight? in my view, the answer should be no. there are two reasons why it is important that the central bank remains alert to financial stability issues, even though its primary objective will remain to secure price stability. first, the ecb ’ s policy analysis for price developments can contribute to financial stability surveillance. here, i have in mind our monetary analysis, which focuses on money and credit developments. exaggerated dynamics in such aggregates can help identify dangerous trajectories that could threaten financial stability. we will have to reflect, once the ssm is operational, on how best to have the broader financial stability assessment benefiting from tools or insights from the monetary analysis. by doing so, we have to be examine closely – first – how structural changes in securisation markets influences the information stemming from monetary analysis, and – second – that analyses and policy goal are closely related and should not be mixed. second, in most of all cases the actions necessary to maintain price stability and those required to maintain financial stability are fully aligned. if, however a conflict arises between these two objectives, it is clear that ecb ’ s mandate leaves

patrick honohan : ireland ’ s eu - imf programme – delivering what it says on the tin address by mr patrick honohan, governor of the central bank of ireland to the european commission dg - ecfin conference, dublin, 10 january 2014. * * * accompanying charts can be found at the end of the speech. introduction the eu - imf programme of financial support for ireland, negotiated in november 2010 and with the final tranches of lending being completed about now, delivered what it said on the tin. amid turbulent market conditions, it provided a safe harbour into which ireland was able to retreat, in order to clarify its ability and determination to deal with the severe financial problems that had so destructively erupted during the global financial crisis in september 2008. those problems had their origin in the property bubble that had already begun to deflate a little earlier, and which had not only generated the huge latent banking losses that have been so much discussed, but also incubated severe fiscal and macroeconomic imbalances. the key to the return of market confidence to the extent that now exists has undoubtedly been rigorous adherence to fiscal goals. over the three years, a continuation of the momentum of fiscal adjustments already initiated in 2008 has brought the public finances back within striking distance of eu norms. the debt - to - gdp ratio has reached a peak and is on target to fall in the coming year. economic growth, albeit modest, has returned on a broad front ; both full time and part - time employment have been growing for many months now. residential property prices in the capital have bounced back a little from their lows of two years ago, and have on average been broadly stable in the rest of the country also for some months. later i will speak a bit about how far the economy is nevertheless away from where we need it to be. but it cannot be denied that, reflecting both policy and general economic conditions, market confidence in irish creditworthiness is higher than at any time since well before the greek crisis developments of may 2010. it was not always obvious that this restoration of market confidence was going to work out. the imf staff appraisal of the initial programme proposal in december 2010 emphasised that the risks were high. and, after the programme began, the euro area slipped into a second dip recession which had its effect in slowing the irish recovery. the cumulative change in gdp, consumption and employment over the three years may have been as much as 2 percentage points lower than