arnold schilder : the boundaries of the civil society? the example offered by financial supervision speech given by professor a schilder, executive director of the nederlandsche bank, in the context of the second european social week held in bad honnef, germany, on 7 april 2000. * * * introduction the main theme of this second european social week is the establishment of a civil society in europe. this week is intended to generate initiatives which could contribute towards this goal. at the same time, we need to ask ourselves where the boundaries of a civil society lie. put differently, does the model for the civil society meet the requirements of the european society that we envisage? i am sure that you have no need of an explanation of the concept of a civil society. put briefly, a civil society is a society built on a large measure of self - control. if you favour a civil society you expect individuals to engage in responsible behaviour. in our societies, freedom is a great good. but freedom goes hand in hand with responsibility. one man ’ s freedom may be another ’ s lack of it. that is why freedom is curtailed by standards and values. at the end of the day, it is these standards and values that protect our freedom. these days we are increasingly asking ourselves to what extent individuals are capable of taking responsibility for their actions. this question arises from our growing interest in moral values. there is an increasing call for control and supervision of compliance with standards. why? well, we are living in highly democratized times, where the need for transparency and openness is growing daily. this is not least because of the development of a wide variety of new media, such as the internet. whether this call for more supervision and control spells the end of the civil society is something i will be going into later. let me first say something about the boundaries of the civil society. why do we need to see to it that individuals shoulder their responsibilities? i shall illustrate my point by taking a look at supervision as it is exercised on the financial sector. financial supervision in summary before discussing the boundaries of the civil society, i would like to provide you with a brief overview of financial supervision. the emphasis will be on how that supervision is organised in the netherlands. however, keep in mind that the issues confronting the dutch financial system are no different from those in other european countries or other parts of the world. in this context, the fact that supervision is organised differently from one country

it is more risky for central banks to act too late than too early. since the start of the year, we have observed that market - based measures of inflation expectations have fallen. nevertheless, the latest forecasts provided by the ecb last thursday continue to point to a gradual rise in inflation over the coming years : 0. 1 % in 2016, 1. 3 % in 2017 and 1. 6 % in 2018. bis central bankers ’ speeches ii. this brings me to my second point : how effective are our non - standard measures? 1 ) since the summer of 2014, we have implemented a series of monetary policy measures, dubbed “ non - standard ”, to complement cuts to key interest rates, which now stand at 0. 00 % for main refinancing operations and - 0. 40 % for the deposit facility. these measures include : 2 ) targeted longer - term refinancing operations, conditional on the provision of bank lending to the real economy. the new series of tltros that we decided to launch on 10 march - tltro 2 - will allow banks to borrow at highly favourable rates, depending on the amount of new credit they provide ; 3 ) purchases of private and public sector securities, to further ease monetary and financial conditions in the euro area. the eurosystem buys asset - backed securities, covered bonds and investment grade bonds issued by euro area sovereigns, agencies and institutions. on 10 march we decided to expand this programme further by including corporate bonds among eligible assets, and increasing the amount of monthly purchases to eur 80 billion from eur 60 billion previously ; 4 ) indications on the future path of key interest rates – or “ forward guidance ” – in order to influence agents ’ expectations. on 10 march, we gave the following indications : “ key ecb interest rates [ will ] remain at present or lower levels for an extended period of time, and well past the horizon of our net asset purchases ”, which means extending well beyond march 2017. turning now to the comprehensive package that has just been introduced, it sends out two clear messages : a ) our decisions are guided by our mandate which is to bring inflation back towards our target of 2 % over the medium term. we are firmly set on this objective, and have a broad range of instruments with which to achieve it. in addition to negative interest rates, which naturally have their limits, we are also acting both on bank lending – via credit easing with the new tltro – and on