has been implemented – without neglecting the central bank ’ s balance, which is now showing positive results – through various mechanisms that comprise the issuance of bills and notes, swap operations, the collection of liquidity assistance provided to banks during the crisis, and the minimum requirement policy. in this way, we are able to control the growth of the means of payment which is, for the first time since the end of the crisis, below nominal gdp growth, reflecting the prudential bias in our approach. in turn, credit should focus on facilitating consumption and investment decisions by the community. on the one hand, we have set strict guidelines to reduce financial system exposure to the national, provincial and municipal public sectors and, on the other, we have created market incentives for the recovery of credit to the private sector from a set of specific measures. therefore, in the past two years, the share of credit to the government in the system ’ s total assets was significantly reduced, and bank actions are focused today on credit to households and businesses. there is a widespread expansion in all credit lines to the private sector and arrears hit a historical low that is currently below the average for the region. all this must be articulated through policy coordination as a sine qua non during the transitional phase. the most successful stories are those of countries that understood how important it was to reconcile aims with instruments in a stage such as this one, where it is the combination of fundamental economic policy tools that will allow us to achieve a gradual and lasting decrease of the inflation rate against a backdrop of sound growth and social inclusion.

and italy, were telling us that we did not need this surveillance framework for fiscal policies. we had to fight very hard to preserve it. today, this episode obviously seems totally bis central bankers ’ speeches outlandish, bearing in mind what has happened since. some, moreover, said that the stability and growth pact itself was “ stupid ”. we always said that the careful monitoring of fiscal policies was essential, as were healthy policies. this remains true today. however, one should add another pillar of governance, particularly within the euro area, in the form of monitoring competitiveness indicators, and unit production costs especially ; the changes to these must also be tracked extremely carefully. for six years at least, we have been telling all european governments to monitor very closely changes to competitiveness indicators and imbalances within the euro area. we emphasise the three pillars necessary for european governance, all three of which must be improved substantially : supervision of fiscal policies, supervision of competitiveness indicators, and structural reforms. the central banks across the whole of the eurosystem – the ecb and the national central banks, i. e. the banque de france in france ’ s case, for instance – have a very clear message for governments : europe ’ s governance must be improved decisively, and governments are not going far enough. we expect a great deal from the dialogue with parliament in order to push governments towards taking a decisive step. bis central bankers ’ speeches