single supervisory mechanism for systemically important banks as well as a single resolution mechanism will be an important step forward. in this regard, a common resolution regime will have to ensure that banks without a viable business model can exit the market in an orderly fashion. such a regime is crucial not only for financial stability, but for sustainable growth as well. a functioning resolution regime strengthens incentives for effective credit monitoring and moderates banks ’ risk appetites. in so doing, it enhances the allocation of capital and reduces the risk of a bubble emerging. better still would be if banks didn ’ t reach the point of having to be wound down in the first place. in this regard, higher capital requirements are a big part of the solution – the single supervisory mechanism is another. the role of monetary policy these are necessary steps that will put the euro area back on the path to prosperity. finally, please allow me to make a few short remarks on the role of monetary policy during the crisis. monetary policy has already done a lot to absorb the economic consequences of the crisis, but it cannot solve the crisis. this is the consensus of the governing council. the crisis has laid bare structural shortcomings. as such they require structural solutions. “ structural reforms may hurt a few vested interests, but they would clearly strengthen the effectiveness, competitiveness and, yes, also the fairness of our economies. ” those are mario draghi ’ s words, not mine. i agree, however. the best contribution a central bank can make to a lasting resolution of the crisis is to fulfil its mandate : that of maintaining price stability. and this is what jacques rueff actually meant when he made that famous statement in 1949. as david marsh has pointed out, it was a declaration of support for common principles of monetary stability rather than an early advocacy of a single currency. we should not jeopardise now what we have fought so long to achieve. conclusion ladies and gentlemen, let me conclude. monetary union has always been both a political project and a prosperity promise. to fully unleash the common currency ’ s potential, efforts are needed on two fronts : structural reforms as well as the abolition of implicit guarantees for banks and sovereigns. but i did not come here to preach ; i came here to discuss, to listen, and to learn. so without further ado, i would like to hand over to our moderator, nicolas beytout. bis central bankers ’ speeches

commencement address by agustin carstens, governor of the bank of mexico, at the school of global policy and strategy, university of california san diego june 2017 thank you, executive vice chancellor peter cowhey, acting dean gordon hanson, faculty, parents, spouses, partners, children, friends, and members of the class of 2017. it is an honor to celebrate with you today. to you, class of 2017, my warmest congratulations and heartfelt good wishes. as we say in mexico, muchisimas felicidades. not only have you earned your degree from this distinguished program in a worldclass university ; you have been living and studying in a very beautiful, unique place in north america and indeed, the world : this dynamic, vibrant, multicultural and international metropolitan area on the pacific rim, at the western extreme of the nearly 2, 000 mile - long u. s. - mexico border. may you have long and successful careers as policymakers. * you just finished your degree, and you have a state - of - the - art toolkit to go into the real world and contribute towards making it a better one. so you are in top shape, ready to go. since the day i last wore a cap and gown, i been in some way involved in making or influencing economic, fiscal, and, above all, financial and monetary policies, both at the national and international levels. and if there is one thing i have learned about policymaking, it is respecting the life - cycle of policies. we can think of a policy life - cycle as a sequence of stages : conceptualization and design ; formalization, for example through a legislative process ; implementation ; evaluation and maintenance ; and finally, adjustment. usually the first three stages are the most exciting and the ones that garner the most attention. but the last two stages, evaluation and maintenance and adjustment, are the most critical to long - term success. in other words, once a policy has been formulated and implemented, over time, responsible policymakers must remain both vigilant and flexible — to be willing to take a wrench to it. we must be more than just the makers of policy ; we must also supervise policies and, as needed, adjust them. without an appreciation for the life - cycle of a policy, it becomes easy to take its early successes for granted. and this is a typical and very serious mistake. public policy can and should help people live better lives. what are the best policies? that