efficient manner. iv. concluding remarks over the past ten years, the euro has established itself as a stable and credible currency and the single european monetary policy has preserved price stability, and thus the purchasing power of the euro, in the euro area. in addition, the euro has played an important role in insulating euro countries from other adverse effects that the financial crisis could have had on their economies, via the foreign exchange markets and other channels, if the euro had not existed. and some member states that have not yet adopted the euro as their currency have indeed experienced such effects. therefore, the euro and the liquidity management of the ecb have also played an important role in safeguarding financial stability in the euro area. with these thoughts on some lessons that could be learnt from our experience with the euro, from the ongoing financial crisis and from the contribution of the ecb and central banks to the preservation of financial stability, i wish us all a fruitful and enriching conference. thank you for your attention.

both an analytic and a policy point of view – other important challenges confronting the euro area, in particular those stemming from its future enlargement and its evolution towards an optimal currency area. iii. the ongoing financial crisis : lessons and challenges for central banks over the past ten years, the ecb has performed its tasks in an often difficult economic and financial environment that was adversely affected by sizeable and persistent shocks ; and it has had to face some extraordinary challenges. the first was the unique, historically unprecedented challenge of conducting the single monetary policy successfully so as to preserve price stability in a newly established monetary union of politically independent, though economically well - integrated, member countries. the other major and exceptional challenge is the one we are still facing today : the preservation of price stability and the safeguarding of financial stability in the euro area during the worst financial crisis in decades. the ongoing financial crisis which is, in many respects, unprecedented in intensity, scope and complexity has highlighted the role of the ecb in safeguarding financial stability. the events of the past year allow us to draw a number of conclusions concerning the responsibilities and actions of central banks in general, and of the ecb in particular, in contributing to preserving price stability through both crisis management and crisis prevention. and they have also shown how the conduct of a monetary policy aimed at the preservation of price stability and the performance of tasks aimed at safeguarding financial stability require the appropriate use of available policy instruments. let me briefly elaborate on a number of pertinent lessons learnt and on the challenges to be faced. it is by now widely accepted that a main underlying cause of the current global financial crisis was the same one that had fuelled similar episodes in earlier times : the excessive growth of credit globally over a long period of time and the associated high leverage in the financial system and in the non - financial sectors of some countries. central banks, through their monitoring and analysis of monetary and credit developments, can provide early warning signals about the building - up of financial imbalances that may lead to excesses in the financial markets – through various channels involving an under - pricing of risk and an increase in market liquidity that can fuel asset price bubbles which will eventually be followed by market corrections. and such corrections will be the more severe, the higher the degree of leverage and the more prolonged the period of excessive credit growth. there is substantial empirical evidence across countries and over different periods in support of this proposition. the ecb ’ s monetary policy strategy, which