). the crisis has rewritten that orthodoxy. it revealed that the safety of individual banks was neither a necessary nor sufficient condition for systemic stability. not necessary because, in any well - functioning system, individual banks can and should fail. not sufficient because, in an integrated web, the chain is only as strong as its weakest link. in focussing on individual banks, policymakers had been, to coin another english aphorism, “ penny - wise but pound - foolish ”. that is why great moderation gave way to great recession ( gai and kapadia ( 2010 ) ). that is why systemic risk entered the public lexicon. and that is why financial regulation has, in the period since, been fundamentally re - oriented towards the monitoring and management of systemic risk. interestingly, that lesson would have come as no surprise to anyone familiar with dynamic, integrated networks outside of the world of finance. assessing the stability of almost any network known to man – whether natural, physical, social or economic – relies upon a system - wide assessment. and protection mechanisms for this system need to be calibrated to system - wide characteristics ( goldin and mariathasan ( 2014 ) ). financial webs are no exception. the history of financial crises suggests they may be closer to the rule. bis central bankers ’ speeches this new orthodoxy has framed the post - crisis regulatory reform agenda. it is why so - called macro - prudential policy has risen in prominence. it is why the world ’ s most inter - connected banks will in future be required to run with extra capital and liquidity. it is why otc derivatives will in future be centrally traded and cleared. and it is why resolution of the world ’ s largest, cross - border banks has become such a priority. for the global banking system we now have a blueprint, an emerging new set of international rules of the road. yet if instead of banks we consider the financial fortunes of countries ; if instead of inter - bank exposures we consider cross - border flows of capital ; and if instead of international banking regulation we consider the international monetary system, it is far from clear that lessons have been learned, much less that the international rules of that road have been reformed. arguably, the rules of the road for this system have failed to keep pace with the growing scale and complexity of global financial flows. it is for this reason that some have called the international monetary system a “ non - system ” or “ anti

the horizon for net purchases under the pepp to at least the end of march 2022 and, in any case, until we judge that the coronavirus crisis phase is over. we will also continue to reinvest the principal payments from maturing securities purchased under the pepp until at least the end of 2023. furthermore, we expect interest rates to remain at their present or lower levels until we have seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2 % within our projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics. also, net purchases under our asset purchase programme ( app ) will continue at a monthly pace of €20 billion and will run for as long as necessary. our intention is for them to end shortly before we start raising the key ecb interest rates. we also intend to continue reinvesting, in full, the principal payments from maturing securities purchased under the app for an extended period of time past the date when we start raising the key ecb interest rates, and in any case for as long as necessary. in any event, we stand ready to adjust all of our instruments, as appropriate, to ensure that inflation moves towards our aim in a sustained manner, in line with our commitment to symmetry. in conclusion, in the face of a worsening outlook for activity and against a backdrop of projected medium - term inflation well below our aim, we cannot let our guard down. monetary policy must maintain a sizeable monetary stimulus until the recovery takes hold, with the aim of keeping favourable financing conditions in place for all sectors of the economy. what do we mean when we say that monetary policy should maintain “ favourable financing conditions ”? in my view, this means that the flexible distribution of pepp purchases and any potential extension to them must take into account at least the following considerations : - the financing conditions considered appropriate at each moment in time should be set with reference to the level that allows our inflation aim to be achieved. currently, the need to maintain very accommodative financing conditions is justified because we are a long way from achieving our inflation aim. specifically, by extending the pepp to at least the end of march 2022 in december we stressed that we would make the net purchases to preserve the financing conditions over that extended horizon and that they would be made flexibly on the basis of the market conditions precisely to prevent a tightening of the financing conditions that would be incompatible with countering the impact of