the economy. ” along the lines of the previous caveat by president draghi, one could add, for instance, that in countries with fiscal space, and / or at a eurozone - wide level, extra spending on infrastructure investment especially in today ’ s environment of extremely low long - term rates would clearly increase low demand in the eurozone, enhance its potential trend growth rate, make the task of monetary policy much easier and finally contribute to public debt sustainability in many countries. in other words, the time has come to use policy tools other than monetary policy, including fiscal and structural ones. thank you very much for your attention. 1 a more detailed account on this can be found in my haba - new york speech ( october 2016 ). 5 / 5 bis central bankers'speeches

responses and threaten financial stability. the reserve bank governor recently acknowledged that in rare situations an ( asset class ) price misalignment may be sufficiently obvious that a monetary policy response in excess of that required for the usual price stability objective could be required ; in these cases in particular, a longer term view of the risks to price stability would be appropriate. 5 the bank also has a crisis management role. some categories of extreme and very low probability risk are also inherently difficult for the financial system to price and manage - the so - called " uninsurable " risks. most insurance policies, for example, excluded compensation for loss arising from the y2k problem ( a once in a millennium event! ). another example of the reserve bank's contingency planning for a low probability, but potentially very damaging event, is its preparation for a potential influenza pandemic. 6 while ` lender of last resort ', foreign exchange intervention, and bank statutory management are the crisis management activities that are usually associated with a central bank, a recent additional example is the reserve bank's outsourcing policy. 7 a primary motivation for that policy is to better ensure that should a ( large ) bank become insolvent, or should an important provider of outsourced services no longer be able to deliver, that bank could continue to be operated. again, while such an event may be in the low probability category, it would have significant consequences for the financial system as a whole. in order to implement any policy action, the bank must be satisfied that the action is necessary and beneficial. figure 2 steps through, in a stylised manner, the typical stages and questions involved in the policy decision process. bollard, a ( 2004 ) " asset prices and monetary policy " an address to canterbury employers chamber of commerce, christchurch, 30 january 2004 http : / / www. rbnz. govt. nz / speeches / 0145812. html see http : / / www. rbnz. govt. nz / crisismgmt for details on the contingency planning that is being undertaken for this risk. see http : / / www. rbnz. govt. nz / finstab / banking / outsourcing / index. html. figure 2. stylised overview of the bank's policy decision process 8 yes no yes no this flow chart is intended as a broad overview - it is not a precise statement of how policy decisions will necessarily be made. no implement