economic sectors and improve the functioning of the international financial systems. of course, it is too early to tell the effect of the latest initiatives by public authorities, but there are some positive signs. the coordinated measures taken in recent weeks by governments and central banks worldwide seem to have had a favourable impact on financial markets as the premia on banks ’ cds contracts have fallen sharply, money market rates have fallen very significantly, spreads have narrowed and volumes traded on money markets seem to have increased somewhat while some ( still smaller than usual in aggregate ) term money market transactions have taken place. despite these improvements, the situation remains far from normal. 6. final remarks uncertainty is at the root of the financial market turmoil that we are currently experiencing. such uncertainty translated into a severe under - appreciation of the risks associated with certain classes of financial instruments and institutions. more recently, with the intensification and broadening of the market turmoil, uncertainty has further increased and developed into a pervasive phenomenon affecting a wide range of markets, assets and financial sectors. systemic uncertainty may potentially undermine the foundations of our financial systems, which are in turn essential for the orderly functioning of our economies. this is why many of the policy recommendations from a wide range of fora and organisations aim at addressing the causes of uncertainty by implementing steps leading to a sound transparency framework based on improved disclosure, high - quality accounting standards and solid valuation practices. in the meantime, public authorities are taking a number of systematic and comprehensive measures designed to address the ongoing financial turmoil. these measures, in combination with the enhanced liquidity provisions by central banks, should restore confidence and contribute to re - establishing an environment in which governments, regulators and supervisors can implement the urgent reforms that are needed in order to anchor the global financial system to sound foundations. it is of essence that private institutions live up to their responsibilities. in particular, by doing their part to restore orderly conditions in the money markets and by resuming in earnest their intermediation function, the private banking community should help to ensure that the liquidity measures taken by central banks and the initiatives taken by governments in terms of bank recapitalization and debt guarantees lead to the desired results. many thanks for your attention.

. to keep the very short - term money market rates in line with the chosen policy rate, thereby delivering the desired monetary policy stance, and 2. to ensure the smooth functioning of the market, thereby contributing to preserving financial stability. in particular, since the outbreak of the turmoil in august 2007 the eurosystem has adjusted the distribution of euro liquidity supplied over the course of the maintenance period by frontloading the supply of liquidity at the beginning of the period and reducing it later in the maintenance period. furthermore, it significantly increased the amount of refinancing provided via longer - term refinancing operations with a view to smoothening conditions in the term money market. in order to keep the total amount of outstanding refinancing unchanged, the net amount of liquidity provided via shorter term refinancing operations has been reduced accordingly. following the rescue of bear stearns last march the financial market turmoil entered a new, more intense phase that further deteriorated with the collapse of lehman brothers in mid september. in response to the renewed tensions, the eurosystem stepped up its efforts to support the appropriate functioning of the euro money markets and to alleviate both the euro and the usd funding needs of euro area banks by : 1. further enhancing the policy of frontloading liquidity at its weekly main refinancing operations, 2. significantly increasing the average duration of its refinancing operations, and 3. also by expanding coordinated provision of usd liquidity within the context of the term auction facility, as will be discussed in the next sub - section. in order to contribute to easing liquidity tensions in the euro money markets, the eurosystem took on 8 october the exceptional decision to : ( a ) temporarily change the tender procedure in its weekly main refinancing operations to fixed rate tender with full allotment so as to provided uncapped access to euro liquidity ( of course, against adequate collateral ), while ( b ) reducing the corridor of standing facilities ( from 200 basis points to 100 basis points ) around the interest rate on the main refinancing operation. more recently, in the context of the latest initiatives undertaken by the eu authorities to restore confidence and the appropriate functioning of our financial systems, on 15 october the ecb approved a new set of temporary measures designed to further enhance the provision of long - term euro liquidity until the end of the year and over the next quarter and to expand the list of collateral accepted in the eurosystem monetary