to some, but such solutions are mistaken. a central bank buying government securities non - stop might appear to be useful, especially for the public finance authority, but it merely postpones the problem and may create inflation. a central bank that instead washes its hands of what is happening on the markets can be useful to others, perhaps for those who succeed in profiting from market instability, but it risks compromising the objective of price stability. to allow each institution to operate in a balanced way, within its own responsibility and without exceeding it, it has to be assigned a precise task, given the independence to pursue it, and the obligation to account for its actions. this means that the institution must have the operational capacity and necessary autonomy to achieve its goals. its actions must be subjected to scrutiny and even to criticism. but such criticism must check the consistency of its actions against the stipulated objective. to expatiate on the modi operandi of a central bank when it intervenes in times of crisis like the current one reminds me of the person who looks at the wise man ’ s finger, rather than what it is pointing to – according to an old chinese proverb. 5 as regards the european central bank, there is no doubt that it acts in full independence, with a clear primary objective, which is price stability in the euro area as a whole. in recent months, as in previous years, the ecb has taken – independently – measures “ when the wise man points to the moon, the fool looks at his finger. ” bis central bankers ’ speeches commensurate with the gravity of the situation with the intent of pursuing the objective that it has been assigned. we are fully aware of the risks, related to a possible excess of activism on the one hand and benign neglect on the other. we have assumed our responsibilities in full, and seek to remind other institutions of theirs. we have explained the reason for our actions, the impact they have on market conditions and liquidity and its aims. we are subject to scrutiny by the public and the markets. anyone who thinks that the ecb has been excessively active on the market, for example on the market for government securities, or the opposite, must first of all demonstrate that such actions have not enabled the ecb to achieve its goal. i do not think there is any indicator – based on market expectations, those of professional forecasters and other indicators – which shows that any of the interventions implemented have undermined the ability of

perfect. a complete separation of monetary powers from fiscal powers creates the right incentives, so that each authority may effectively pursue its respective objective. the surveillance of fiscal policies ensures that these remain within predefined parameters, and if this does not happen sanctions are envisaged by the eu institutions and financial markets. in reality, the framework is not perfect. the reason is that it relies on some simplifying assumptions, dear to economists, and perhaps even to lawyers. however, those assumptions do not always match the reality. let me briefly illustrate two. the first assumption concerns the deterministic nature of the framework, which does not consider the possibility of shocks, of forecast errors, of disruptive elements, all of which can cause crises, in particular public finance crises. in other words, the assumption was made – largely theoretical – that there would be no crises. experience, both before and after the birth of the euro, however, shows that public finance problems may occur every so often, for various reasons. they could result from the infringement of established rules and inadequate supervision by multilateral institutions, as in the case of greece. or from the build - up of imbalances in the private sector, particularly banking, which become unsustainable and turn bis central bankers ’ speeches into public debt, as in the case of ireland. or lastly, they could even result from relatively low economic growth that, after a recession, reduces the room for manoeuvre for public finances and makes the debt dynamics unstable, as in the case of portugal. there are remedies for these construction defects, such as the strengthening of fiscal discipline and a better oversight of private debt – perhaps with more centralised powers for supervising the financial system, such as those that were recently adopted at european level. the initiatives that have been taken so far and are currently under discussion between the european commission, the council and parliament are going in the right direction. they can be further strengthened. however, the possibility of a crisis and of a country losing access to financial markets can never be completely ruled out, especially in a context of global instability like the current one. we must not repeat the mistake of assuming that thanks to some “ magic ” europe is immune to any crisis. the second simplifying assumption that was made by the founding fathers is that markets work perfectly and can assess the various risks at any time, including those arising from an excessive accumulation of public debt. the experience of recent years has shown that this