like liquidity ratios and margin requirements. this suggests that macro - prudential policies can support us in fulfilling our mandate. conclusion let me conclude. since the launch of the euro, we have become more interconnected. trade and financial links have deepened further and most companies and many banks have acquired a european perspective. we are, de facto, each other ’ s stakeholders. during the crisis we have seen how what happens in one euro area country, however big or small, reverberates in all others. the crisis has partly reversed some integration but, as shown in the two reports, we are now witnessing a degree of financial market de - fragmentation and reintegration. we are also waiting for more sound research and analysis to come on stream. a deeper understanding of the issues involved is paramount to making further progress on any one of the multitude of fronts that we still need to explore. so, to this end, it is with great pleasure that i now give the floor to our panellists for what i anticipate will be an in - depth and fruitful discussion on the state of financial integration after the experience of the financial crisis. for a review see smets, f. ( 2013 ), “ financial stability and monetary policy : how closely interlinked? ”, sveriges riksbank economic review 2013 : 3. bis central bankers ’ speeches

to understand that finance and economics are not natural sciences, there are no “ fundamental laws ” to discover, but they are more about modelling and understanding the outcome of interactions between humans in human - made systems. that is, probably, one of the biggest challenges risk managers need to face. 4. challenges ahead for central banks as risk managers last but not least, i would like to quickly refer to the challenges ahead for central banks. i ’ m not going to refer to the challenges faced by those central banks which are also banking supervisors or regulators, which are relevant enough to be deserve a full conference on their own, but i will focus on the crisis and risk management function in central banks. the job of central banks is akin to that of risk managers, in the sense that they have to deal with crisis situations and manage risks to the economy using a limited toolbox. the role of the ecb in the management of the different stages of the crisis has been and continues to be very prominent, also through our participation in institutions such as the recently created european systemic risk board. obviously, such crisis management role requires having a deep understanding of risks, particularly systemic risks, to the financial system and the economy in general. of course, the materialisation of risks may potentially have implications for the central bank ’ s own financial position. in this regard, central banks around the globe also act as risk takers in the conduct of monetary policy operations and investment operations. central banks, as other public investors, are distinct from most market participants in that they have been entrusted with the management of public funds. as a consequence, central banks are typically perceived to be very conservative investors. while this perception may be right with regards to the risk appetite of the central bank as an investor, this is not so clear when it comes to its role as policy - maker. central banks need to take some risks. for instance, they must hold amounts of assets denominated in foreign currency on a scale that private financial institutions would consider to be very large from a risk - return perspective. bis central bankers ’ speeches further to this, at times of crisis central banks tend to follow, due to their responsibility as policy - makers, the so - called “ inertia principle ” that recommends not to take risk management actions that could worsen the pro - cyclical behaviour of the financial markets. obviously, such principle applies to monetary - policy operations, where central banks have typically increased their level of risk taking during the crisis, but