all of this should contribute to making public finances in the euro area credibly robust. the ecb welcomes this outcome. as regards the euro area crisis management instruments, we welcome the decisions of the heads of state or government of the euro area to strengthen the efsf and the esm in a number of areas. first, there is now greater flexibility in the euro area crisis mechanisms to act as backstops, thanks to the decision to accelerate the entry into force of the european stability mechanism, esm, to july 2012 and for the european financial stability facility, efsf, to remain active in financing programmes that have started until mid - 2013. second, the clarification that as regards private sector involvement, the euro area will adhere to established imf practice is also helpful in reassuring investors. third, the decision to include an emergency procedure into the voting rules of the esm1 is essential for effective decision making procedure, especially in crisis situations. as regards the efsf, the governing council of the ecb has decided that the ecb will be able to act as agent for the efsf in its market operations. the ecb – probably supported by a number of national central banks – will make its technical infrastructure and know - how available to the efsf. the technical and legal preparations have started and we hope to complete them in january. iii. credit rating agencies the activities of credit rating agencies, notably in relation to sovereigns as well as the efsf, have lately occupied centre stage in the debate in europe. calls for better regulation have become louder. against this background, the commission ’ s recent legislative proposals on credit rating agencies, which the ecb broadly supports, is also discussed by this committee. credit ratings have a direct impact on the market functioning and the wider economy. a sound and robust framework must thus be created. this framework should be geared towards the following objectives : to reduce market volatility ; to enhance the quality of rating process ; and to restore market confidence. the two issues that are of particular importance are, first, the assurance of appropriate underlying methodologies and the transparency of ratings ; and second, the reduction of hardwiring of ratings in legislation and market practices. ratings simplify complex risk assessments. but they should only be one of several inputs for investors. in particular, they should be no substitute for financial institutions and other investors to carry out their own assessment. this is the main step towards avoiding mechanistic

critic of the tobin tax named after him. concluding remarks fifteen years after the setting up of the ecb, we need to press on with the ongoing relaunch of the institutional underpinning to put the euro on a sounder footing. such a relaunch should not put into question the achievement of the single monetary policy, the ecb ’ s clear and unequivocal mandate and the clear division of roles and responsibilities among different policy areas. in particular, a fully - fledged banking union, as complement to monetary union supports financial integration and monetary policy transmission and hence ultimately reduces the burden on monetary policy. at fifteen, the ecb, and the euro, are approaching adolescence. in the crisis the euro area had to grow up very quickly amidst daunting challenges to its identity, even its very james tobin : “ on the efficiency of the financial system ”, lloyds bank review, no. 153, 1 – 15, as recalled by willem buiter in his 2009 blog on “ useless finance, harmful finance and useful finance ”. http : / / blogs. ft. com / maverecon / 2009 / 04 / useless - finance - harmful - finance - and - useful - finance / # axzz1evyusi2t. bis central bankers ’ speeches existence. further turbulence cannot be ruled out. but i am confident that we, at the ecb, will do all that is needed for the euro to have a long and prosperous life. after very difficult years of adjustment and renewed institution building, the euro will stand on solid feet and emerge stronger, provided that all in the family of stakeholders live up to their respective responsibilities. bis central bankers ’ speeches