##ties are different, there has been a convergence in objectives and frameworks. central banks have stepped up their supply of funds at longer maturities. some have broadened the range of collateral accepted in their secured lending operations. they expanded the scope of eligible counterparties so as to ensure a wider dissemination of funds. importantly, major central banks conducted coordinated actions to provide longer - term funds to address dollar funding needs of non - us banks, thereby ensuring an adequate distribution of liquidity across borders. yet, after more than a year of crisis, credit markets remain very fragile, normal interbank relationships have not been reestablished, and those frictions could destabilize the financing of the corporate sector, thus further threatening economic growth. with our last decision, we have given financial intermediaries full assurance that their liquidity needs will be met, in an environment of total clarity and absolute predictability. we hope that this will contribute to reduce uncertainty and restore confidence between counterparties, which is a prerequisite to a functional money market. this may depend on more than simple liquidity provision. but central bank ’ s ability – and willingness – to use their capacity are a major source of stability in the financial system, and should be seen as such, both by market participants and the general public. second, on monetary policy. we have participated in a concerted action by major central banks this is a major, and unprecedented, move to restore confidence, but one, i want to emphasize, fully and absolutely consistent with our mandate. it is obvious to all observers that the overall environment has dramatically changed in the last three weeks. declining oil and commodity prices, together with stagnant activity have significantly altered the inflation outlook. based on current conditions, we can expect " instant " inflation rate to come under our definition of price stability somewhere in the middle of 2009. in addition, long term inflation expectations, as measured by the " 5 years in 5 years " break even ( or swap ) inflation rate, has dropped significantly under 2 %, perhaps reflecting the credibility created by our past actions. to be sure, we must remain vigilant as regards wage developments and the still possible second round effects from past price surges. but, overall, i would asses that our new monetary stance is in line with what is necessary, in current conditions, to fulfill our mandate. let me now elaborate on two other set of policies, which, although not directly linked to the currency, contribute to underpin

banks through infusion of public money and, second, to foster confidence in deposit guarantees. in an european framework, such actions involve mainly national decisions which had to be made, in many cases, with some urgency. hence the impression that, at least initially, the coordination may not have been perfect. but things are falling progressively into place and i am confident that any remaining issues will be quickly dealt with, according to the roadmap and joint principles recently adopted by ecofin ministers. so i would encourage all market participants to take a step back and, as jean - claude trichet said “ collect themselves ” to look at the whole package of measures which have been publicized. true, they have been announced through a succession of public statements. but, taken together, they represent decisive steps and a coherent package towards restoring confidence. i am convinced that their impact on the real economy and future growth is going to be extremely significant. overall, it is fair to say that the euro has passed the test and comes strengthened out of the current difficulties. the eurosytem will keep fulfilling its priority mandate of price stability while also contributing to the broader objective of financial stability. governments are increasing their cooperation. so the eurozone has shown it is well equipped to live up to its responsibilities as a truly global player in the international monetary system of the 21st century. i thank you for this opportunity to present my views.