becomes less impaired, there would clearly be less need for continuing with the non - standard measures to the same degree. q. how do you see the state of the money markets right now? are they improving so that further phasing out could be warranted? overall, the money market is in a much better condition than it was earlier in the crisis, even though i would have to say that we are not anywhere near normal conditions we had before the turbulences started in 2007. i can envision that as time goes by, it will no longer be necessary to maintain full allotment in all operations. q. should the interest rate corridor be rewidened? as president trichet explained in the press conference following the april policy meeting, there were arguments on both sides. we took the decision not to rewiden the interest rate corridor to its normal size at the april meeting. however, going forward, i would argue in favour of normalising the width of the corridor sooner rather than later. in my view, it is increasingly harder to justify the non - standard width of the corridor as time goes by. i don ’ t think there is any mechanical link between the decision as to when to phase out specific non - standard measures that have been introduced during the crisis. q. on bond buying programme. what is your point of view with greece, ireland and portugal being in the hands of the eu and imf? does it give rise to the need for the ecb to intervene? it is increasingly hard to justify the continuation of the smp in light of the fact that it was introduced in order to alleviate some of the dysfunction in the monetary policy transmission mechanism in some markets, and i do not think that those conditions hold at the moment to the same extent. q. do you think it should be stopped completely or just be there in case the need arises again? the mere presence of the programme, even if no purchases at all are made for a very long time, can be a stabilising force in the markets in case additional tensions appear on the horizon. that would be an argument for keeping the programme in place while recognising that it may not be employed unless unusual circumstances appear. bis central bankers ’ speeches q. how would you evaluate the programme. has it been a success? the programme has been a success. one has to ask what is the counterfactual for what would have happened in the euro area had the programme not been in place.

on the holdings of greek debt, our banks would manage to weather that. to understand how well capitalised our banking system is, a comparison may be useful. our banks already meet the stricter capital requirements that are being phased in under basel iii. by contrast, in some other member states in the euro area there have been explicit calculations about how much additional capital would need to be infused into banking systems in order to meet those requirements. this is testament to the very strong capital position of our banking system. regarding steps to limit exposure by any of our banks to any sovereign holdings in the euro area, as part of the supervisory process of the central bank of cyprus we demand that all of our banks have good risk management systems in place. of course, we do not control the specific decisions on portfolio holdings of banks. whenever we determine that there is undue concentration of risks then we demand that additional capital be held in order to account for these risks. this way we manage risks to the system. q. do you agree with an assessment recently made by cypriot officials and the finance minister to be precise, that his hands are actually tied in terms of future ratings of the republic if rating agencies continue to make a linkage between the economic fortunes of greece and the economic fortunes of cyprus, and do you think that this linkage is appropriate? in my view, all authorities must live up to their responsibilities. what we are experiencing in cyprus over the past many months is a very unfortunate cycle of downgrades of the sovereign. in large part, and according to the analysis of the ratings agencies, these downgrades are due to the fact that as a country we have not yet taken the fiscal consolidation measures that our government and our parliament agreed were necessary to implement last year. it is a very costly delay as it raises the cost of financing of our public debt, it raises the cost of financing by private business, and it reduces employment and growth opportunities. there are things that can be done in order to reverse this. the policies that could reverse this deteriorating situation are well known, and they involve shoring up the long - term public finances of the republic. so i repeat, all authorities must live up to their responsibilities. q. would you give me specific examples on how you believe the structural problems in the cypriot economy can be addressed? we hear a lot about fiscal consolidation but what exactly should be done? i could mention a couple of the things that were already agreed by our parliament and government last year