should, for that reason alone, be left on the back burner. autonomous monetary policy autonomous monetary policy is a kind of “ absorber ” of economic shocks. it is meant to reduce their impact and smooth the economic cycle. it prevents an economic contraction being borne by the unemployed and those on low incomes more than is necessary. certainly, the more flexible is your economy ( in terms of public finances, the labour market, and so on ), the easier it is to cope with shocks and the less monetary policy is needed. however, the case of the eurozone shows how tricky it is when the absorber in the form of monetary policy is switched off and nothing replaces it. the shocks are bigger and hurt more. listeners themselves can answer the question of whether the labour market and labour law are likely be made more or less flexible ( and dismissals made easier ) in the future. in doing so, they will answer the question of whether there will be a need in the future for more or less domestic monetary policy in the czech republic, a country whose conservative population is so averse to upswings and downswings. 1 / 3 bis central bankers'speeches the “ convergence trilemma ” the standard “ monetary trilemma ”, which you know very well ( a country cannot simultaneously have a fixed exchange rate, an open capital account and autonomous monetary policy ), is accompanied in a converging economy of our kind with something i call the “ convergence trilemma ”. no country can simultaneously have high convergence growth, a fixed exchange rate, and low macroeconomic imbalances, be they internal or external. in our case, catching up with our wealthier, low - inflation western peers means a long - term tendency for our currency to appreciate. this is hardly consistent with a permanently fixed exchange rate. the paradox of the eurozone the eurozone paradox is that the best possible members of the club are the countries that are so stable themselves in monetary and economic terms that they don ’ t need “ to buy in stability and credibility ”. such countries have fewer and fewer reasons to adopt the euro. conversely, the more a country begs to have the euro, the bigger the problem it will represent. this explains why almost no one is conducting a euro debate in sweden, even though it does not have a derogation and many would like to see it in the eurozone. canonically, the same goes for us : either we can continue to stabilise ourselves

the business plans which they agreed in order to receive the sanction of the european commission dgcomp for the state aid they received, to reach a net interest margin of 2 per cent. given they are constrained by contracts on the trackers, there is only a limited range of options for achieving this. only then can they build and hold sufficient capital to be compliant with international regulations, to be fully financially autonomous and not dependent on an implicit backstop of the state, to have the resilience to deal with future shocks and to serve customers properly. their recent return to profitability is modest and significantly dependent on provision write - backs rather than normal business profitability. the crisis continues to have serious legacy issues that cannot be resolved easily or painlessly. to mention just one example, ensuring that borrowers whose loans have been sold to unregulated firms do continue to obtain the consumer protections that they previously had is a concern which the bank has been to the fore in advocating. i am glad to see this reflected in legislation ( on which the bank has actively advised ) currently being enacted by the oireachtas. without detracting from the importance of appropriate pricing on the svr loans, i should not conclude without emphasising that delays and uncertainties surrounding the resolution of non - performing loans remains a much more acute problem. the latter problem is of course one which we have discussed in this committee repeatedly and on which progress remains damagingly slow. also, they are required by the terms of the business plans which they agreed in order to receive the sanction of the european commission dgcomp for the state aid they received, to reach a net interest margin of 2 per cent. given they are constrained by contracts on the trackers, there is only a limited range of options for achieving this. bis central bankers ’ speeches