do you believe in the possibility of second - round effects resulting from wage increases, as we are now seeing in germany? it is up to each central bank to avoid second - round effects when we see a price shock affecting raw materials and energy sources, on which we cannot take action. that ’ s even our fundamental duty. what matters is to prevent other prices from matching those movements, which have to remain temporary. in particular, the various economic agents and the social partners must not imagine that the correct inflation rate to take into account is that which comes from the abrupt rise in energy prices. in the medium term, all economic agents must bear in mind that the correct reference is that of less than 2 %, close to 2 % in the medium term, which we ’ ve made completely credible. that medium - term price stability is our primary mandate, and we owe it to our fellow citizens. let ’ s not forget that inflation affects in particular the poorest and least advantaged members of society. the ecb has embarked on a series of non - standard measures to react to the crisis. what ’ s your initial assessment? alongside standard measures relating to the key interest rates, set solely in order to attain medium - term price stability, we have been using non - standard tools : they aim to help restore bis central bankers ’ speeches the efficiency of the transmission of monetary policy to the economy in a context of certain dysfunctional markets. as it happens, we intervened as early as august 2007, providing unlimited liquidity at fixed rates, because the crisis had led to a dysfunctioning of the money market. today, we are seeing that the interbank market is working better. there are however a small number of banks which are still too dependent on the ecb. to solve this problem gradually, it is important that they are not encouraged to resort to the central bank rather than to the markets, and that ’ s why the governing council is insisting that they increase their capital and use all the facilities offered to them by the member states. is your policy of buying the bonds of “ peripheral ” states on the markets efficient? it ’ s one of the non - standard measures that we have taken to restore the transmission of monetary policy. we make public every week the scale of our interventions, but not the specific market we are intervening in. in any case, we absorb each week the liquidity that was injected as a result of this programme. we do not carry out quantitative easing. but don ’ t

allow their participants to mitigate the costs associated with risk control measures ( e. g. cross - margining ) ; • central counterparties use payment systems and other infrastructures operated by central banks to carry out their activities. for these reasons, central banks closely follow and contribute to the discussions related to central counterparty clearing. this conference is an important element in this respect. let me now outline a few central points of this discussion. central counterparties must have adequate risk management procedures. central counterparties play a systemically important role in many financial markets. the failure of a central counterparty can severely disrupt financial markets. central counterparties are highly specialised in managing risks and failures have been rare. nevertheless, there is no room for complacency, and any efforts to improve risk management methods are most welcome. as mentioned already several times in this conference, in november 2004 the g - 10 central banks and the iosco issued a report which set out 15 comprehensive international recommendations for promoting the safety and efficiency of central counterparties. the escb - cesr working group is working in close cooperation with eu ccps to adapt these recommendations to the european context. academic research can provide additional hints on the specific situations which are targeted by the recommendations. this has been shown at this conference by alejandro garcia and ramo gencay or john cotter and kevin dowd with their approaches to extreme market events, and by froukelien wendt in her survey on intraday margining. the governance structure of central counterparties should in principle be market driven. the governance structure may have a significant influence on, for example, risk management and other strategic decisions of central counterparties, as pointed out by thorsten koeppl and cyril monnet. although the optimal governance structure cannot be defined ex - ante, the markets may in many cases be in a good position to identify and produce it. public authorities must, however, step in whenever market failures become significant. in this respect, the ecb supports the views expressed in the cpss - iosco recommendations according to which governance arrangements for a ccp should be clear and transparent in order to fulfil public interest requirements, support the objectives of owners and participants and, in particular, promote the effectiveness of a ccp ’ s risk management procedures. the features of post - trading structure should also in principle be market driven. we are witnessing fast developments in the field of financial market infrastructures, especially in europe, but also in other parts