that financial conditions are not really an impediment to economic activity and for inflation to increase. third, unconventional monetary policy measures are effective if other policy areas contribute decisively to solving underlying structural problems in the economy and financial sector. this can, for instance, prevent that the monetary transmission mechanism loses its efficacy by a lack of capital or the persistence of legacy assets on banks ’ balance sheets. resolving those issues can, for example, reinforce the effects of the targeted long - term refinancing operations that the ecb is offering to banks to support the supply of credit at the present juncture. having said this, monetary policy may wish to display more inertia – by which i mean caution or carefulness - in deploying policy instruments on those fronts where our knowledge is less developed. this applies to less conventional policy tools, of which the effects are still not fully appreciated, both in phasing - in and the phasing - out. a more inert approach by the central bank is also warranted if the nature of shocks and frictions in the economy cannot be clearly identified. frictions may reflect structural underlying weaknesses in economies or the banking sector, of which the root cause cannot be addressed by monetary policy. a cautious monetary policy response is also appropriate, if there is a risk of complacency in other policy areas. for example when monetary policy measures lead to delayed efforts to shore up bank balance sheets or implement structural reforms at the national level. the emu perspective the dilemma on when to act forcefully and when to apply caution in a context of instrument uncertainty is of clear relevance for central bankers worldwide. policymakers should consider to apply more caution in deploying unconventional tools that are subject to uncertainty, for example because their effects depend on shocks and frictions that cannot be clearly identified in real time. given the intricacies of brunnermeier and koby ( 2018 ), the reversal rate, nber working paper no. 25406. monetary policy in a monetary union, i believe this may be of particular relevance in an upcoming review of the ecb ’ s strategy. at the same time, in the ecb ’ s case, we can draw comfort from the enhancements in the functioning of emu that have been implemented in the last decade. this includes the establishment of the european stability mechanism, the european banking union and first steps towards a capital markets union. these institutions contribute to align the incentives for action and the policy measures of other

players with those of monetary policymakers. this will reduce the dilemmas for the central bank to employ balance sheet instruments. their use can then be tailored more easily to circumstances where they are most effective. in that sense, it is clear that monetary policy in the euro area is helped by further steps to move to a more complete economic and monetary union. and speaking about european institutions : imagine what maps sir francis drake, vasco da gama and columbus could have drawn when we would have cooperated. in their times, sir francis drake explored for elizabeth i of england and for her alone. vasco da gama carefully drew maps of his trip round cape horn for the portuguese king only. and cristopher columbus, a native of genoa, was hired by and thus worked solely for the spanish king and queen. but we, you, brave explorers of the monetary policy waters, we work together. we can combine our lessons learned. we can together combine our sketches and work on one clear map. let ’ s be the cartographers of the ocean of the uncharted monetary policy.