, following the lehman brothers ’ debacle in september 2008, a crisis broke that generated the most severe global economic contraction since the great depression. among other side - effects, this crisis obliged us to revise much of the previous consensus on monetary policy. it would however be unfair to ignore the fact that, in the specific monetary policy realm, discordant voices had some years back raised objections to the predominant model. in particular, the bank for international settlements had maintained since the early 2000s that, in specific circumstances, central bank conduct in the face of severe risks to financial stability would have to be pre - emptive and not only reactive. simply put, the damage wielded by a financial crisis might be so great that some price stability slippage in the present would be bis central bankers ’ speeches warranted in exchange for preventing a future, more serious deviation that might prove more difficult and costly to reverse. the bank for international settlements also asserted that the combination of a price stabilityoriented monetary policy and a merely micro - prudential supervisory policy did not ensure the stability of the financial system as a whole. in this connection a third tool was needed : a macro - prudential supervisory policy. while it is still too early to draw all the economic policy lessons arising from our experience of this crisis, i believe certain necessary changes can be discerned. among these, the need to pursue macro - prudential policies is one of the most evident implications. macro - prudential policy the crisis has demonstrated that the previous combination of monetary policy and microprudential policy is insufficient both for shoring up the stability of the financial system as a whole and for ensuring, in the event of crisis, that the impact on the real economy is limited. to achieve these goals a macro - prudential policy is also needed, and it must be equipped with new objectives and instruments. there is already some agreement on the need to have this new macro - prudential policy rest on two levels or dimensions. first, a cross - sectional dimension, focused on controlling the distribution of risks within the financial system at each point in time. this requires analysis of how institutions interact and what are the consequences of these interactions for the system as a whole. the aim should be to identify those interactions of most global systemic significance in order to subject them, logically, to more demanding soundness requirements. further, macro - prudential policy should also heed the time dimension, which analyses how

aggregate risk evolves and how it interacts with the normal functioning of the real economy. this is the perspective needed in order to design, for example, measures to temper the procyclical tendencies inherent in the financial system. as is known, the banco de espana was a pioneer in this field when, in 2000, it introduced dynamic provisioning. in the initial stages of the crisis the potential of such a tool was evident ; however, the subsequent heightening of the crisis also showed its limitations. the interactions between monetary and macro - prudential policy will pose complex challenges to central banks. theoretically, monetary policy should continue focusing on maintaining price stability ; and macro - prudential policy, on ensuring financial stability. in practice, however, action by each of them will inevitably exert a strong influence on the objectives of the other, and that has implications for the institutional design of the macroprudential authority. the advantages arising from coordination between both policies would suggest assigning the central bank with a pivotal role in the pursuit of macro - prudential policies. this has been the path followed to date in most cases. thus, for instance, in the united kingdom a sister committee has been set up within the bank of england and alongside the monetary policy committee, namely the financial policy committee. italy, belgium and ireland have followed similar arrangements. in other countries such as france and germany, committees have been set up with the participation of other economic authorities, but the central bank plays a very important role in them, and actually wields veto powers over the decisions of the macroprudential body relating to or affecting the field of competence of the national central bank or of the eurosystem. nonetheless, concentrating different and occasionally conflicting economic policy objectives within a single institution no doubt makes accountability more complicated and may make the institution ’ s mandate more ambiguous. this is indeed one of the reasons why in other instances, such as the united states, the option chosen was to create institutions in which bis central bankers ’ speeches responsibilities are distributed more symmetrically between the central bank and the other economic authorities. this is no doubt a complex debate with unquestionable political connotations. i see more advantages than drawbacks in the european approach, since i believe that to achieve good coordination between monetary and macro - prudential policies and ensure sufficient capacity and speed of response, the central bank should play an important role in the design and management of the new macro - prudential instruments and measures