participants and the public. the ecb regards the reforms made to the macroeconomic and budgetary surveillance framework as not ambitious enough : they appear to leave room for discretion by member states to escape sanctions in the event of non - compliance. more automaticity in this regard would be preferable. bis central bankers ’ speeches 4. conclusion in conclusion, i believe that the crisis has exposed a couple of shortcomings in the monetary policy paradigm : policy frameworks are insufficiently medium term - oriented, and the role of monetary variables in this context is underappreciated. but the core elements of the paradigm, including central bank independence and policies decisively oriented towards the maintenance of price stability, remain pertinent for the period ahead. central banks have taken unprecedented steps to safeguard this overriding objective during the crisis. looking ahead, it is up to other key stakeholders in the global financial and economic system to live up to their collective responsibilities and mandates in order to avoid any repetition of past mistakes. bis central bankers ’ speeches

want, but also can change the economic policy in our favour. this shall not be popular, but shall certainly be useful for us. 2. psychological reactions should not be countered by pragmatic measures, but rather by those inducing psychological effects regardless of the consequences that may logically ensue. when germany decided to promptly take a decision to guarantee all deposits in order to strengthen confidence of the public, everybody was thinking what the chancellor angela merkel actually had in mind when she said that “ all citizens ’ deposits are safe ”. when countries decide to increase the volume of insured deposits, nobody should calculate the impact such measure would have on the budget, since in case of some countries that could be as high as the country ’ s gdp. quite frankly, i underrated the significance of the psychological effect! still, the nbs was quick and efficient enough in its response to all the challenges during several recent weeks. banks have managed to withstand the pressure without resorting to either tax payer ’ s money or decreasing the volume of insured deposits as the level of reserve requirements have remained unchanged. 3. all countries tend to overreact instead of taking moderate measures. financial package assembled by the imf, eu and world bank for hungary is the best illustration. i am convinced that the response in case of serbia will be decisive, not in the sense of taking additional funds, but additional measures to maintain and strengthen macroeconomic stability, which is much more efficient. all of that has already been incorporated into the budget for 2009 and will soon be made public. 4. not even a political defence mechanism, such as membership in the eu, will now do to defend a country from a potential crisis situation. no more muddling through, it is only hard work that counts now. spreads are again more under the influence of macroeconomic data than membership in certain political organizations. this is a confirmation for serbia that entering into force of the agreement on stabilization and association with the eu does not mean that we will be able to relax because the agreement represents only a chance, and not a guarantee of a better life. 5. each country is primarily concerned with taking decisions and passing measures which are in its own best interest, and only then looks at the broader picture. this is best illustrated by the national system of deposit insurance. no matter how many memoranda of understanding in respect of supervision are signed, if things go wrong, everybody will almost exclusively tend to its own interests. recent events confirm that