in the following chart that shows the pattern of domestic banks´ holdings of national debt going down until 2009 and then increasing afterwards. [ slide 6 : public debt held by domestic banks ] see cesare, a., grande, g., manna, m. and taboga, m. ( 2012 ) “ recent estimates of sovereign risk premia for euro - area countries. ” bank of italy, questioni di economia e finanza, occasional papers n. 128. bis central bankers ’ speeches an aside aspect shown by the chart is that public debt was not taken predominantly by the domestic banking sectors until 2009 as the domestic share declined until then, indicating the progress of financial integration across member states during many years. to understand what happened in the run up to the crisis it should be highlighted that until 2007 the evolution of public debt in the countries now under stress was financed mostly by external investors and not by resident financial institutions. another aspect that is sometimes also ignored refers to the fact that the banks ’ portfolio of domestic public debt is not very high in percentage of total bank assets and even now is generally below the historical average. [ slide 7 : public debt held by domestic banks in % of total assets ] the points i just made seem to run counter to the idea that the macro imbalances in peripheral countries was mostly driven by the public sector. as seen in the charts, with the possible exception of greece, that seems not to have been the case. i will show in a moment that the imbalances came mostly from the private sector expenditure behaviour laxly financed by the financial sector. this fact is in turn connected with another major lesson of the crisis that reveals also a shortcoming in the initial design of the monetary union : the notion that it was enough to discipline public finance, through the stability and growth pact, to avoid major imbalances in the euro area. this mistake is surely related to two features of the dominant economic thinking at the time : • first that the private sector is essentially stable and self - correcting composed of fully rational agents always optimizing inter - temporally with knowledge of the future probability distributions to infinity of economic returns and variables. in such a world no defaults are admitted or dangerous bubbles possible. only the public sector can create instability. • second, that finance does not matter for real economy fluctuations. after the real business cycles school, the rational expectations hypothesis and the intertemporal optimization paradigm, money and finance were considered not relevant anymore.

jean - claude trichet : the financial crisis and the role of central banks – the experience of the ecb keynote address by mr jean - claude trichet, president of the european central bank, at the international symposium marking the 50th anniversary of bank al - maghrib, marrakech, 29 may 2009. * * * dear governor jouahri, dear governors, ladies and gentlemen, it is an honour and a great pleasure for me to be a speaker at this celebration marking the 50th anniversary of the bank al - maghrib. i would like to congratulate governor jouahri on this occasion, and wish him and the staff of the central bank all the best for the future. the eurosystem has a well - established framework for dialogue with the bank al - maghrib, the euro - mediterranean seminar. this forum regularly brings together the governors of eurosystem central banks with those of the “ barcelona process : union for the mediterranean ”. the euro - mediterranean seminar has, since its first meeting in 2004 in naples, strengthened our dialogue by addressing various topics relevant to central banks around the mediterranean. the bank al - maghrib and governor jouahri have contributed to this fruitful exchange of views and will no doubt do so at the next meeting in march 2010 in cyprus. in addition, the bank al - maghrib has close bilateral relations with some of the central banks in the eurosystem and in particular with the banque de france on various aspects of technical assistance. we are living in a very challenging time. morocco, like all countries worldwide, has been hit by the global crisis. the business cycles of morocco and the eu are largely synchronised and the existence of various economic transmission channels such as trade, tourism, and remittances, explain why both the european and moroccan economies are going through a challenging period in the present global context. my speech today will focus on the global financial crisis and its roots, on the ecb ’ s response to the crisis and on the role of emerging market economies in the world economy. the global financial crisis and its roots let me start by briefly highlighting the origins and evolution of the current crisis. imagine a neutral observer who looked at the financial sector about a decade ago and then didn ’ t look at it again until the eve of the current financial crisis. he would have found a completely different financial industry, one which over the past decade has undergone a dramatic shift of focus. he would have