bit optimistic. but this being said it is difficult to judge what it means without all the analysis. for instance, when i look at the negative growth of the last quarter – minus 1. 2 per cent in france – one comforting aspect was that three - quarters of the decline was due to a reduction in inventories. so that was of course much better for the future because it means that once the inventories are back to the required level, to the level that corporates want to have, production starts up. so it is difficult to comment without seeing all the explanations. for the time being i have the feeling that our situation will be relatively, slightly better than that of some of our neighbour countries. what was one of our weaknesses in the past – that is a strong reliance on domestic demand and domestic consumption for growth, and certain weakness in net exports – has become a strength in the downturn. exports have fallen, like in germany, but their weight in gdp is much lower, so that it has hit the economy less. the consumer spending trend has remained positive. compared to countries like spain or the uk the average indebtedness of households was lower, so that the effect of the turmoil on consumer spending has been also relatively lower than in other countries. for all these reasons we felt that we had some slightly better resilience, but we must remain prudent. ft : should germany do more in terms of fiscal stimulus? cn : i think that they have decided on a second package that is sizable. i recognise the importance of the efforts that germany has made. ft : your plans for a central clearing house for derivatives have provoked controversy in london, where this is seen as a continental grab for business to pass though lch. clearnet and people are unconvinced that you need to have this lender - of - lastresort, central bank function. cn : for me, the argument is very simple. if you really want to have a safe system you really need these clearing houses to have the possibility of extensive access to central bank liquidity. i think that is the only way to ensure that in times of stress, when you have eventually defaults of counterparties, you can manage the liquidity in a smooth fashion. having said that, no central bank would accept large - scale access to central bank liquidity without having the oversight. ft : but market participants say that even after the lehman collapse, they still managed to unlock a lot of these trades

. but what the spanish have done is to take the whole cycle, so that you are obliged to build up certain provisions in the upturn and you can use them in the downturn and that reduces and eventually eliminates the pro - cyclical effects of the credit cycle. the second concept is that for the trading book. one could oblige banks to build up buffers using part or all of the increase in the value of securities held so that until you have finally sold the security, have booked the profit, you ’ ve got a potential profit that you can turn into a cushion. so when you enter a downturn and market values drop, the cushion would be the first defence against that. how it would work exactly still needs to be developed. these are two different types of activities, two different types of cushion. you could have both. ft : could you imagine the ecb embarking on a large - scale programme of quantitative easing, or would you rule it out? cn : i would not rule out anything and we have not ruled out anything. what i believe we must do – and we keep studying various options – is to look at a few things and see whether we need to go beyond what we have done already. by the way, i consider that we are already implementing a non - standard monetary policy. the fact that we have, first, enlarged the pool of collateral and, second, decided to make the provision of liquidity at all maturities up to 6 months at fixed rates and for unlimited quantities, means we are not in a normal framework. ft would you call that quantitative easing? cn : it is a way of doing quantitative easing, certainly, because, it means that we can provide liquidity to each institution beyond what they actually need. having given at our last policy meeting the assurance that we would continue this as long as is needed and at least until the beginning of next year, means that we have given the assurance to the banks that the easing policy will continue for quite a long period of time. having said that, what we need to look at now is not the theory. we have to be pragmatic, and look at what works and what does not work. the objective of so - called additional measures would be to act where parts of the credit market are not working, the transmission mechanism is not working. a central bank may consider that at a certain point it is appropriate to intervene directly in these markets. at the moment, we have