stability should emerge. in other words, we have to avoid keeping policy rates at their current historically low levels for too long. changing policy rates does not necessarily entail a phasing - out of all the measures of enhanced credit support. at the same time, our liquidity measures will not all be required to the same extent as has been the case thus far. in particular, as mentioned earlier, we should avoid setting wrong incentives by fostering banks ’ dependence on the ecb ’ s substantial liquidity support. this calls for our starting to phase out the enhanced credit support as soon as money market conditions permit us to do so. let me use this reasoning to illustrate our exit strategy on the basis of two highly stylised scenarios. should money market conditions improve before upside risks to price stability emerge, the enhanced credit support can be gradually withdrawn before we start changing policy rates. this would not imply a change in the stance of our monetary policy as long as the liquidity support would not be needed to the extent it has been so far. in this respect, we will have a first opportunity to review the typology and modalities of our refinancing operations at our first meeting in december. in case money market tensions persist while upside risks to price stability emerge, some elements of the enhanced credit support would need to remain in place. at the same time, policy rates could already be changed. it is also important to stress that all measures of the enhanced credit support were designed with the clear view to facilitating their phasing - out. let me reassure you that, not least thanks to our political independence and credibility, we are well - equipped to act in a timely and prompt manner when the need arises. we continue to monitor the stabilisation of the economic activity and financial markets very closely. however, i would like to reiterate that not all our liquidity measures will be required to the same extent as they have been necessary thus far. after the storm : the future of monetary policy what lessons can we learn from the causes of the crisis and the crisis itself for monetary policy? let me mention three key elements. first of all, it seems that a central bank, especially in difficult times, is served well by having a clear and unambiguous mandate, a robust strategy and a principles - based approach to communication. second, the ecb does not need to change either its mandate or its strategy. our mandate is well - communicated and understood by the

on the most important cornerstones of the current financial crisis, from the perspective of a european central banker, of course. 2. 1 the start of the crisis : fine - tuning money markets on 9 august 2007, short - term money markets rates such as the overnight rate suddenly started to surge. the ecb was the first central bank in the world to react, and did so immediately, calming the markets, first, with a technical announcement via the relevant reuters pages and, later in the course of the day, with the provision of unlimited central bank liquidity with overnight maturity at the prevailing policy rate. the demand of banks turned out to be extraordinarily strong, totalling eur95 billion. over the next two days, further liquidity - providing fine - tuning operations were conducted, so that tensions in short - term euro area money markets abated to some extent. this series of fine - tuning operations turned out to be the starting point of the first phase of policy responses to the financial crisis, a phase that lasted until september 2008. during that time, the ecb addressed tensions in euro area money markets within its operational framework, mainly by “ frontloading ” credit extended via its main refinancing operations within the reserve maintenance period, while at the same time keeping the overall supply of central bank liquidity unchanged. put simply, “ frontloading ” means that the ecb provided higher amounts of credit at the beginning and lesser amounts of credit at the end of each relevant period, the reserve maintenance period, instead of always extending the same amounts of credit in each operation. further important measures that fall into the early phases of the crisis were the lengthening of the average maturity of our liquidity provision by conducting supplementary refinancing operations with maturities of three and six months, the provision of us dollar liquidity against euro - denominated collateral, on the basis of a swap agreement with the us federal reserve system, and the conduct of a two - week full - allotment tender in the penultimate main refinancing operation of 2007 in order to address especially elevated funding concerns of banks over the year - end of 2007. until the end of august 2008, all these measures – which were taken within the eurosystem ’ s operational framework – proved broadly sufficient to align short - term money market rates with our policy rate, although the volatility in money market rates was higher than before august 2007 and money market spreads at longer maturities remained elevated.