incentive not to be overly transparent about borrower risk. [ 3 ] for his part, the investor cannot ensure that the originator is acting in their best interests. after the financial crisis, securitisation was blamed for passing bad loans on to unsuspecting investors. the financial crisis has highlighted potential weaknesses in the securitisation process, which are particularly relevant for very complex securitisations. these include insufficient transparency and insufficient risk management systems and valuation procedures. as a result, securitisation markets have been stigmatised in public perception. however, with appropriate structure and regulation, securitisation may have a positive long - term social value. securitisation markets complement other long - term wholesale funding sources for the real economy. this allows enterprises to diversify their sources of funding. by gaining indirect access to investors on the capital market, small and medium - sized enterprises can particularly benefit from this. securitisation can also open up space on banks ’ balance sheets, thus creating leeway for further lending to the private sector. a market for prudently designed asset - backed securities may potentially improve the efficiency of resource allocation in the economy and ensure better risk sharing. [ 4 ] this occurs due to the transformation of relatively illiquid assets into more liquid securities, often sub - divided into several tranches with varying levels of risk. as a result, the costs of capital may be lower and economic growth may be higher. from the perspective of central banks, given appropriate structure and regulation, securitisation can play a significant role in supporting both monetary and financial stability. for example, in certain cases, high - quality asset - backed securities could ensure better transmission of monetary policy, since a greater fraction of enterprises get access to credit markets. in terms of financial stability, greater diversification in bank liabilities may make banks ’ lending decisions less dependent on the business cycle. and it may reduce borrowers ’ exposure to refinancing and liquidity risk. this could strengthen banks ’ resilience and reduce systemic risk. but how do we ensure that there is appropriate structure and regulation in the markets for securities? in this context, following the financial crisis, the financial stability board proposed a set of measures aimed at greater resilience in securitisation markets. [ 5 ] amongst other aspects, there was coordination in the development of policies for improving transparency and aligning incentives in securitisation. furthermore, a recent report of the

run your models and you crunch your data. it ’ s less quantifiable. so markets turn to central banks to seek some reassurance on what lies ahead. do you have the feeling that among the political risks you mention could be various threats to the independence of central banks? that ’ s not my impression. the importance of independent central banks is well understood. but there may be some tensions, because there may be a level of expectation for central banks that is too high after years of financial crisis. there may be a temptation to make central banks responsible for things that governments should address through fiscal policy, for example. just because central banks had to invent new monetary policy tools to face unexpected shocks in the last decade doesn ’ t mean they can do everything. it ’ s very important for central bankers to refrain from hubris. central bankers are technocrats with narrow mandates ; the counterpart of their authority is that they strictly abide by their mandates. ours is to maintain price stability. some things we shouldn ’ t and can ’ t do, for example redistributive policies, or tackling our economies ’ productivity slowdown. market operators wonder about what will happen to europe ’ s monetary policy once mario draghi is gone next november. how much does continuity matter here? our own monetary policy committee is the 25 - strong governing council. just like the fed, and contrary to other central banks, we have many people taking part in the decision, so that in and of itself is an element of continuity. most of our decisions in recent years have been taken unanimously, or by large consensus. the president has an important role, of course, but the overall approach and philosophy of the ecb is unlikely to change at the end of the year. some european politicians deplore that the lack of speedy progress on eurozone reform means that the monetary union is ill - equipped to face another potentially serious shock. do you share their pessimism? ever since the euro ’ s creation we ’ ve had economists predicting the end of the euro for the next year, and it ’ s still here. and investors know by now that it ’ s always a mistake to underestimate the strength of the european project. it is a long - term political construction. it being political doesn ’ t mean it is easy, and it has both positive and negative consequences. on the positive side, it means that it is resilient when tested by short - term economic shocks. on