in the context of this institutional set - up with many safeguards, the provision of ela has a broader scope than monetary policy operations. first, ela is not limited to monetary policy counterparties, but is available to a broader set of credit institutions, provided they are solvent. the wider focus takes into account the fact that financial institutions outside the narrow realm of our eligible counterparties can run into temporary liquidity shortages that could challenge financial stability. second, the set of assets accepted as collateral for ela purposes is wider than the one required for eurosystem monetary policy operations. therefore, the cost of liquidity drawn under ela is also higher than the marginal lending rate. bis central bankers ’ speeches the ecb ’ s response to the crisis as the crisis unfolded, our approach to the lolr function evolved in parallel. three main phases can be identified. the first and second phases of the crisis : system - wide liquidity strains the first and early phase was the immediate post - lehman brothers liquidity crisis. not unlike in other advanced economies, the financial trauma that followed the demise of one of the largest global investment banks created anxiety about the magnitude of european banks ’ exposure to subprime products of uncertain quality. this prompted a sudden stop in the availability of money market funding for many credit institutions in the euro area and a systemic rush to cash. as interbank markets seized up, the strains were diffused with virtually no region or sector being spared. the second phase of the crisis came as a consequence of a much more targeted and disruptive loss of confidence : the sovereign debt crisis. this was special to europe ; it brought on the development of redenomination risk and thereby threatened the integrity of our currency. banks ’ exposures to selected governments came under intense market scrutiny and entire national banking systems lost access to wholesale funding. note that during both the first and the second phase, banks faced an urgent need to replace a source of market funding that had suddenly become unavailable – primarily an impaired access to money market borrowing in the post - lehman phase and the impossibility to roll over maturing bank bonds during the debt crisis. in both episodes, however, the original source of stress was investors ’ distrust in the quality of banks ’ exposures – to the private and the public sectors. our role was the same in both phases, namely to create new reserves, on demand, for cash - stripped banks with viable business models, and thus to help these banks go through an emergency

these policies would make it possible to avoid repeating the mistakes of the past although, as i just showed, there is no guarantee that such wisdom will prevail. what is missing, in my view, is some deeper thinking about why policy - makers and economic agents more generally took inappropriate decisions. i believe the actions and policies were unsustainable because they were aiming at an objective which was not sustainable. at the heart of the wrong decisions that were made in the past, and which led to the crisis, was the expectation that the increase in prosperity experienced by our societies in previous decades would simply continue, unaffected by the ongoing integration of emerging market countries into the global system. policies, be they regulatory or macroeconomic, aimed at achieving a rate of economic growth which was based on past experience and which turned out to be too high. these policies were thus too expansionary, leading agents to borrow excessively, and they fuelled a bubble which ultimately burst. in my view, advanced economies have not appropriately taken into account how globalisation, and the integration of hundreds of millions of people into the market economy, might affect their standard of living, including the possibility of a slower pace of economic growth and greater inequalities within societies. 25 a few years ago samuelson dared to challenge the common wisdom according to which the law of comparative advantage always and everywhere benefits all parties engaging in trade. 26 his hypothesis implied that a fast rate of growth in some parts of the world economy could reduce the rate of growth, and increase its dispersion, in other parts of the world. his ideas were rapidly dismissed, not only in academic circles but more generally by society. there is, to my knowledge, very little research being done in this field, with the notable exception of ragu rajan. 27 i think that samuelson ’ s analysis can help to explain why the trend rate of income growth in the advanced economies might have slowed down substantially during the last few years, upsetting the social and political balance on which that growth rested. in particular, it helps to understand why, for the first time since world war ii the prospects for the younger generations appear to be overall less promising than for the previous ones. and why advanced economies, by pursuing policies with an ultimately unrealistic objective, fell into a crisis. if the above hypothesis is correct, then it ’ s a mistake to think that we can get out of this crisis and back on a path of sustainable growth only through the support