. we cannot open a pandora ’ s box and end up in a situation where monetary policy is no longer shielded against political influence. moreover, any such subordination would imply that the objective of the internal market is superior to the objective of economic and monetary union. this is not the case ; these are equal and complementary objectives of the european union. moreover, as the ecj made clear in the pringle case, “ [ … ] each institution of the union is to act within the limits of the powers conferred on it in the treaties, and in conformity with the procedures, conditions and objectives set out in them. ” 5 and third, there is a limitation : article 22 cannot confer general regulatory competences on the ecb – it can only adjust the ecb ’ s monetary policy toolkit by clarifying that the competence for clearing and payments covers derivatives. the treaty drafters made the ecb ’ s objectives and tasks very clear. as the european court of justice said, a measure falls under the responsibility of the ecb when it is intended to pursue an objective such as the consistency of monetary policy or the proper transmission of monetary policy. this objective, in turn, contributes to the primary monetary policy objective of maintaining price stability6. the reason why monetary policy needs to cover ccps ’ liquidity is that derivatives clearing has become a cornerstone of the financial system. we must not forget that ecb measures must also comply with the principle of proportionality. this means that any ecb actions in the field of clearing will have to be appropriate for attaining monetary policy objectives and cannot go beyond what is necessary to achieve those objectives. and it goes without saying that the ecb will not be acting in a legal vacuum – in considering the proportionality of its actions, it will have to take into account existing secondary law and justify any measures it takes. and the court of justice would be the ultimate arbiter to determine whether the ecb is respecting the principle of proportionality. conclusion let me conclude. it has become evident that disturbances affecting ccps can have an impact on monetary policy, on payment systems and, ultimately, on price stability. the commission ’ s proposal to amend the emir framework is a step in the right direction as it reflects the responsibilities of the ecb – as a central bank of issue – in the supervisory framework. however, we also need to adjust the ecb ’ s monetary policy toolkit to ensure it can fulfil its role. this requires

extraordinary measures are the means to an end : the return to the ordinary. although we expect the recovery to be gradual and protracted, these measures are working. ordinary times will eventually return and, with them, more normal interest rates and costs of borrowing. it is the responsibility of households now to ensure that in the future, when the recovery takes hold and extraordinary measures are unwound, they can still service their debts. similarly, lenders have responsibilities. financial institutions should actively monitor risk stemming from households and not take false comfort derived from mortgage insurance and past performance of household credit. as our simulations suggest, the overall credit profile of canadian households could well shift if debt continues to grow at current rates. the bank expects that canada ’ s financial institutions will continue to apply their high standards of risk management, for which they are being justly lauded the world over. policy - makers and regulators, including the bank of canada, have responsibilities, as well. the bank is working intensively with the office of the superintendent of financial institutions ( osfi ) at the basel committee on the design of new international capital and liquidity standards. the bank collaborates closely with the department of finance and discusses with federal agencies, as required, to monitor evolving risks and take appropriate actions. the bank ’ s ongoing research and analysis of the financial system, including the work i have discussed today, is an important element of our commitment to helping ensure canada has a resilient, secure financial system that enhances the economic and financial welfare of all canadians.