ecb we had the insurance versus incentives trade - off in mind when designing our non - standard measures. let me briefly conclude with an illustration of this point with reference to our provision of liquidity and to the omt. with regard to our unlimited provision of liquidity, we have applied the classic bagehot principle of providing insurance at penalty rates and against adequate collateral. there is a thin line between bank illiquidity and bank insolvency, and the former can easily morph into the latter. by requiring collateral, the central bank ensures that it only provides credit to a fundamentally solvent institution, and the penalty rate is the means to ensure that central bank liquidity provision is indeed a last resort. these features also apply to all our provisions of liquidity. over the past years, the overnight rate at which non - distressed banks can obtain market funding has fallen to levels close to the rate on our deposit facility. in comparison, the rate on our refinancing operations at which we provide liquidity has effectively turned into a penalty rate – not to mention the rate charged by national central banks when they provide emergency liquidity assistance to distressed banks which is set even higher, above our marginal lending rate. ecb liquidity is also only available against collateral. our collateral policy has evolved in the crisis but strict valuation and haircuts rules are always applied. last but not least, our liquidity is only available to banks, subject to micro - prudential supervision. prudential checks by national supervisors ( and looking forward, by the future prudential arm of the ecb ) ensure that liquidity only flows to fundamentally solvent institutions. the omts also provide partial insurance. to qualify for interventions, countries must have negotiated a precautionary european stability mechanism programme with other euro area governments, with imf involvement. this condition serves to ensure that governments continue to correct existing economic and fiscal weaknesses when omts are activated. moreover, the objectives of the programme are clearly defined. the ecb does not aim to eliminate spreads between sovereign bond issuers. this is because sovereign yields do not have to be identical in a monetary union and market discipline has an important role to play. the ecb will solely buy bonds with shorter remaining maturities. relying on short - term debt strengthens the disciplining power of the right to stop our interventions at any point in time. in short, omts strike a balance between ex ante and ex post efficiency, and

many believe, budgetary austerity and reforms do not penalise governments. indeed, in recent years in europe there has been a positive correlation between political popularity and budgetary rigour ( see chart 1 ). the correlation is much stronger than the one between political popularity and economic growth ( see chart 2 ), which indicates that, for a given level of growth, healthy public finances reward governments. this suggests that political leaders who have the courage and the ability to reconcile balanced public finances with the economic growth are rewarded over time. democratic systems should not to be blamed if advanced economies risk stagnation and do not grow. they are in danger only if people succumb to the illusion or become resigned to thinking that democracies do not allow change. centuries of history demonstrate just the opposite : that without democracy there is no change, and sooner or later there is decline. thank you for your attention. chart 1 trust in national government vs. government balance ( average 2005 – 2009 ) – eu sources : eurostat, eurobarometer and ecb calculations. note : “ tend to trust government ” is the proportion of respondents to the may 2010 eurobarometer survey who reported trusting their national government. chart 2 trust in national government vs. growth per capita ( average 2005 – 2009 ) – eu sources : eurobarometer, ec and ecb calculations. note : “ tend to trust government ” is the proportion of respondents to the may 2010 eurobarometer survey who reported trusting their national government.