, the lowest growth rate in more than a decade if we exclude the crisis in 2009. this was largely due to country - specific factors, such as excessive investment in china and infrastructure and regulatory bottlenecks in brazil and india, to mention just a few. this process is necessarily accompanied by a reduction in demand for foreign goods, including euro area exports. this is bad news for the euro area, whose recovery so far has been largely driven by export strength. in addition to structural issues, there are a number of potential risk factors that have not materialised. for example, there is a risk of a real estate bubble in brazil, where house prices have doubled in three years. takats, e., and c. upper, 2013, “ credit and growth after financial crises ”, bis working paper no 416. calvo, g., coricelli, f., and p. ottonello, 2013, “ jobless recoveries during financial crises : is inflation on the way out? ”, nber working paper 19683. bis central bankers ’ speeches a second important factor is the large drop in domestic private investment following the onset of the global financial crisis. between 2007 and 2011, private investment in the then 27 countries of the eu fell by €354 billion, a 15 % decline relative to its 2007 level. this compares with a mere €17 billion ( or 0. 2 % ) drop in private consumption. while it is not unusual for private investment to fall sharply during a contraction in real gdp, its contribution to the latest contraction in the eu is among the largest on record, and some countries have seen unprecedented declines ( for instance, over the same period private investment declined by 27 % in spain, by 47 % in greece and by 64 % in ireland ). today, private investment is almost 20 % below a 25 - year trend that came to an end with the financial crisis. 12 the third important factor is weakness in domestic demand. this is often left out of the public discourse, but micro evidence suggests that it is a problem that cannot be underestimated. for example, smes interviewed for the ecb ’ s “ survey on the access to finance of small and medium - sized enterprises in the euro area ” have consistently cited “ finding customers ” as their most pressing concern. this suggests that euro area corporations face serious problems on the demand side which seem to be more pressing than the problems stemming from the bank lending channel. by way of comparison,

current policy - making. this is clearly the case with macroprudential policies. indeed, macroprudential policy is a critical dimension of the public policy response to the crises we have experienced since 2008 and has figured prominently in the lessons we have drawn from them. let me mention three of these lessons. bis central bankers ’ speeches • first, the oversight of individual components of the financial system is not enough to preserve financial stability. having robust financial institutions is a prerequisite for ensuring financial stability but it is not in itself sufficient. • second, maintaining price stability does not guarantee financial stability. in the euro area, the inflation mandate has always been fulfilled, but has not prevented the emergence of crises in the region. these crises have forced central banks to broaden their mandates to include financial stability in order to ensure the functioning of the monetary policy transmission channel as well as to guarantee the smooth financing of the economy. stable inflation and financial stability are therefore two objectives that monetary and macroprudential policies respectively seek to achieve. • third, the lehman episode and the euro area crisis have confirmed that financial crises do not stop at borders. consequently, financial system regulation must be the fruit of international cooperation. these lessons, in the post - crisis world, are at the heart of policy - makers ’ actions. financial crises have led us to renew our approach to financial system regulation, and notably to supplement it with a macroprudential perspective. but what is a macroprudential policy? how can we define clear objectives? what are the policy instruments? how can we organise it? what imbalances need to be redressed? these are only some of the numerous issues that contributors address in this review. in particular, the broad scope of policy action is a major challenge. we especially need to anticipate all possible conflicts with other economic policies, such as microprudential, monetary or fiscal policy. i will now identify at least two prerequisites to ensure that macroprudential policy is effective : first, if conflicts arise between macroprudential policy should prevail. microprudential and macroprudential policies, we must be particularly vigilant about this point in order to ensure the overall macro - welfare of the economy and guarantee the smooth financing of the economy. for example, imposing stringent requirements on financial institutions during an economic downturn may not be an appropriate policy response. although it would reinforce the individual robustness of financial institutions, it