that, in turn, undermines the credibility of monetary policy. if the central bank moves into that kind of territory, it could become ensnared by its own policy and forfeit some of its credibility. why were you unable to convince the other governing council members with those arguments? most of my colleagues were evidently convinced that these concerns, while justified, could be addressed by designing the programme appropriately. they certainly did take my arguments and concerns on board – even though my overall assessment of the programme still ultimately differs from theirs. ecb president mario draghi has cited disruptions in monetary policy transmission as the reason for setting up the new programme. that does indeed seem to be a problem ; the ecb ’ s most recent interest rate cut failed to reach some euro - area countries. do you also believe that there are disruptions in the monetary policy transmission mechanism? bis central bankers ’ speeches we have been hearing that argument ever since the first government bond programme was launched in 2010, and yet we are still talking about disruptions in the transmission mechanism today. so my question is : faced with structural problems such as a lack of competitiveness and a loss of confidence in some countries ’ public finances, are government bond purchases really the right tool for repairing the monetary policy transmission mechanism? but you agree with the diagnosis? our monetary stimuli are still being transmitted, but our monetary policy is not currently reaching all euro - area countries in equal measure. that fact is connected, not least, with the lack of credit demand in some countries and the deleveraging process in their banking systems. yet these adjustments are all appropriate and necessary to enable these economies to stand on their own two feet again. do government bond risk premiums actually reflect the fundamentals at all any more or are they partly down to the irrationality of the markets? ideas about what is a fair interest rate level based on the fundamentals differ very widely and have a large subjective component. however, i wouldn ’ t say that the markets ’ actions are completely irrational at present ; they are based on concerns that the reforms in some countries could grind to a halt. these reforms and, above all, the question of whether they will actually be pursued in the future have a major impact on the growth outlook and thus also on credit risk. so it would be best for the ecb to do nothing, to simply wait for the storm to pass? not making government bond purchases certainly wouldn ’ t imply that the eurosystem was merely waiting for the

uk have been both highly professional and stability - oriented in the past. i strongly hope that supervisors here will be able to keep up this good work and turn a blind eye to demands for deregulation and lax supervision. the current regulatory and supervisory standards we have set together are an important lesson from the financial crisis and it would be a mistake to roll them back. i am convinced that in the long run, well - capitalised and strictly supervised financial systems are the most successful ones. to be clear, my call to refrain from using regulation or supervision for the sake of increasing one ’ s competitiveness is equally addressed to the eu. there might be a certain temptation to use brexit as a chance to strengthen financial centres across the rest of europe, for example by offering discounts with respect to licensing procedures. this is not a route we should take, and i am confident that the strong role and far - reaching competences of the ssm, including the ecb ’ s responsibility in licensing, will forestall such ideas becoming reality. while i am serious about my warning of lax rules and supervision, i am cautiously optimistic that we can prevent this scenario from materialising. and this is because i know my colleagues in london very well, and i know that they share my views on this issue. our cooperation with the uk prudential regulation authority has been exemplary in the past, and we will invest all our efforts in continuing this partnership in the future. now, more than ever, we should also harness our relationship to work together closely during brexit. information sharing needs to be an important part of this. for example, when european authorities examine the risk models of banks wishing to establish a subsidiary on the continent, we would benefit from knowing what the pra found in their previous assessment. this includes at what time the pra last examined the model, under what assumptions, and to what verdict it came. conversely, we are open to sharing all necessary information that the pra might need to process applications by eu banks to operate in the uk. the guiding principle of our cooperation should be to ensure a smooth transition to a post - brexit world. as supervisors with the necessary distance from political haggling, we can make a substantial contribution by providing pragmatic and efficient solutions. in parallel, i believe that european and uk supervisors should fathom out how we can put our future cooperation on a more formal footing. 6 closing remarks ladies and gentlemen, let me summar