speeches euro area financial markets, this effect cannot just be assumed. to achieve a homogenous reduction of term premia across relevant interest rates, segmentation would have to be taken into consideration in our strategy. overall, the yardstick for the success of any targeted asset purchases would not be the size of our balance sheet, but the observable effect of our operations on term premia across markets and jurisdictions. or put differently, asset purchases in the euro area would not be about quantity, but about price. this is why i said that quantitative easing is a misnomer. however, whether reducing term premia would in turn be effective in reducing real interest rates for firms and households depends on complementary policies, in particular the continued repair of the banking sector. for example, the sizeable reduction of spreads we have witnessed since july 2012 has not in itself translated into higher credit volumes and lower bank lending rates. this is largely because the restructuring of the euro area banking sector remains ongoing. thus, an essential complement to any monetary policy strategy is a strict implementation of the ongoing comprehensive assessment of euro area banks and swift corrective action to bridge identified capital shortfalls. let me conclude. unconventional monetary policy tools are less unconventional than the word implies. they are unusual, because they respond to highly unusual circumstances. they imply risks that have to be carefully weighed and mitigated. but fundamentally, unconventional tools are only a means for central banks to continue doing what they have always done : managing aggregate demand, by influencing the level of real interest rates and other monetary transmission channels, to maintain price stability. to borrow from giuseppe tomasi di lampedusa, in these unusual times “ everything must change, so that everything stays the same ”. it is this that will determine both the appropriateness of using targeted asset purchases in our monetary policy operations, and the design of any such purchases. bis central bankers ’ speeches

independent of their individual characteristics, mixing the wheat with the chaff. but securitisation in itself is a useful financial tool. it allows the diversifying of sources of funding for many borrowers who, otherwise, would have no access to capital markets. it allows the opening up of new channels of finance for the real economy. and it can allow cushioning the impact on the supply of credit that would otherwise result from bank deleveraging. in this context, the ecb and the bank of england took a joint initiative to promote and garner recognition for high - quality, transparent forms of securitisation. this was useful in several ways : first, it sent a clear message to the private sector that key public - sector participants in abs markets were not abandoning these assets, which had been lagging in terms of issuance volumes and liquidity. second, it signalled to other policymakers that all abss should not be tarred with the same brush. third, it created a basis for additional coordination between our two institutions which, in an era of increasingly cross - border regulation, is crucial to avoid loopholes and inconsistencies. this experience with securitisation, then, was an example of what appropriate governance means : having regulations that are sufficiently sound to preserve the integrity of the market, but not so taxing as to suffocate it. that is why i said that free markets stipulate not just the right to take part, but also the means to protect that freedom. to be true sources of opportunity, and to protect the interests of those who use them, they need policing. and that makes the market, inevitably, a political construct. consider the case of markets that are truly open – by which i mean, as open as the single market of the european union, where internal frontiers have been abolished entirely, where passporting of services across the entire eu is a right, not a privilege. in this situation, national governments, or national courts of law, cannot alone provide full protection to their citizens against abuse of property rights or any form of unfair competition that may arise from abroad. nor can they alone protect the rights of their citizens to carry out business abroad unimpeded by protectionist restrictions. for the market to be truly free, there needs to exist a judiciary power that can enforce the rule of law on all, everywhere. it has to have jurisdiction across the entire market. a judiciary power implements the law, so there must