and one european, linked respectively to the weaknesses of some countries ’ economies and public finances ( sustainability risk ), and to the incompleteness of european construction and the attendant fears of a break - up of the monetary union ( redenomination risk ). europe ’ s response to the sovereign debt crisis has consequently been two - pronged : on the one hand, individual countries have pledged to adopt prudent budgetary policies and structural reforms to support competiveness ; on the other, a far - reaching reform of eu economic governance has been undertaken. the definition and implementation of this response was not smooth, let alone optimal. but the constraints were significant ─ first and foremost, the lack of trust among member states, partly justified by the episodes which ignited the crisis ( fiscal misreporting and failures in financial supervision ). moreover, there was a lot of ground to be covered in a very short term. europe had no tools with which to manage a sovereign crisis and the legal basis for providing financial support to countries in distress had to be defined. international treaties needed to be drafted and ratified, also to strengthen peer oversight on national fiscal policies and structural reforms. further integration of financial markets was necessary to increase the resilience of the area to asymmetric shocks : the banking union and the on - going project of the capital market union are both far reaching reforms, affecting in depth the institutional fabric of member countries. the ecb governing council, by providing a series of conventional and unconventional monetary policy measures to fulfil its price stability mandate, ensured accommodative financial conditions that mitigated the fall in aggregate demand and helped to “ buy ” the considerable time needed to implement this strategy, while countering market uncertainties that could undermine its implementation. the european strategy to respond to the crisis has brought overall a stabilization of financial conditions and an easing of tensions in sovereign debt markets, even if we are still in deep and at times unknown waters. but, obviously, bis central bankers ’ speeches monetary policy cannot guarantee strong and lasting growth on its own, it cannot be a substitute for the needed reforms, it can only provide favourable conditions to speed the process up and absorb its short - term costs. a successful effort requires, once again, action at both the national and the european level. lacking a common fiscal capacity, demand in the euro area must draw support from a more convinced use of the available fiscal space. in particular, this implies a substantial, and symmetric, respect

have hit the stock market hard since last fall, and declines in equity wealth could begin to show through more forcefully to consumption spending. all in all, i think it is too early to have a strong conviction that the economy is reaching the end of this period of quite slow growth. as the fomc noted yesterday, the risks remain toward economic weakness. conclusion our announcement yesterday was part of an ongoing effort to communicate with the public at large and with markets. this desire to be transparent has led, in the last several years, to numerous changes in the procedures of many central banks. i do not know what future changes, if any, might be called for, but i am confident that central banks will continue to look for ways to make certain that their objectives and policies are clear. thank you for your attention.