or the types of operations changed. looking ahead, we can already start thinking about a financial risk management framework that will be appropriate for a central bank that has returned to a more conventional environment for the conduct of monetary policy, while still following these principles. i now look forward to the panel discussions, which will pick up on some of those issues in more detail, and to hearing your views. 1 treaty on the functioning of the european union. 4 / 4 bis central bankers'speeches

to adhere to are the “ compass ” that helps it fulfil this mandate. when a central bank is facing a crisis, it needs to consider whether its monetary policy operations are still proportionate. this need stems from the obligation under primary law ( proportionality principle ) to properly weigh up all the components of a given measure against one another. the aim is to determine whether the expected benefits of the measure outweigh its costs. as a general rule, a stable risk management approach and a through - the - cycle approach are advisable. however, extraordinary circumstances may require extensions of the framework, such as the acceptance of additional collateral. if this still proves insufficient, unprecedented types of monetary policy measures may call for entirely new operations, accompanied by new risk management measures. the evolution of the eurosystem ’ s monetary policy operations in response to the crisis featured all these activities. our risk management framework has evolved accordingly, guided by our stable principles. first, the “ gusty winds ” : during the early stages of the financial crisis, we increased the amount of liquidity we provided to the banking system without tightening the risk control framework, despite the onset of stress in the system. in this respect, our risk management framework followed a through - the - cycle approach – thereby avoiding further distress to the banking system. it also stood in stark contrast to the more pro - cyclical nature of the commercial banking sector ’ s risk management approach – and was thus part of the central bank ’ s duty to lean against such potentially self - reinforcing winds. it was possible to avoid tightening the framework without exposing the eurosystem to undue risks because the pre - crisis framework had been calibrated in a sufficiently prudent manner. in fact, the framework proved to be robust enough to protect the eurosystem from losses resulting from counterparties defaulting, such as lehman brothers or the icelandic banks – although the complexity of the collateral in some of these cases led to lengthy liquidation processes. this experience certainly merited a careful review of the collateral rules for complex securities and financial innovations. more broadly, it justified taking steps towards reducing the reliance on external credit ratings, in line with the g20 agenda. second, the “ storm broke out ” : after the default of lehman brothers, it became evident that such standard measures were no longer sufficient to achieve price stability in the euro area. we therefore provided enhanced credit support and, later on, non - standard credit operations in the light of the