can result from the fact that they are aware of their systemic relevance. this, and the externality illustrated above, would justify ad hoc regulation to ensure that sifis are extrasafe. at first sight, there should be little interaction between additional requirements for sifis and monetary policy. during a crisis, however, sifis would be prime candidates for liquidity injections by the central bank. 10 in the second category of macro - prudential measures that increase the resilience of the financial system, we have market reforms such as a drive towards centralising exchanges wherever possible at central clearing counterparties ( ccps ), and structural reforms aimed at separating commercial banking from other activities. centralising transactions should reduce counterparty risk and allow a better monitoring of financial flows, especially of derivatives, for which little data is available in general. the extra information should be useful for calibrating monetary policy. the concentration of transactions should reduce uncertainty about who holds what – an uncertainty which, during a crisis, can end up freezing entire markets and forcing central banks to intervene. therefore the development of ccps seems beneficial to the conduct of monetary policy. the separation of commercial banking from other activities helps to protect deposit holders by insulating them from excessive risk - taking activities by banks. it can take the form of a carve - out of some form of narrow bank, 11 or by limiting trading with own funds ( something similar to the volcker rule adopted by the united states ). it is unclear whether this separation reduces the overall amount of risk in the financial sector, or simply shifts it to institutions that are not deemed systemic. i would argue that if it is a mere redistribution it might be dangerous : how do we know that we won ’ t have a repeat of 2007, when we saw that vast pockets of risk had gone undetected and had grown to such an extent that they threatened the stability of the whole financial system? the whole point of such a separation should be to change the incentives for risktaking. by separating two fundamentally different business cultures, investment and client services, it should be easier to redesign incentives to make the client part a safer place. 12 at the moment, however, this second part of the structural reforms seems missing. such a separation would reshape the financial industry and affect the transmission channels of monetary policy in ways that are hard to predict. on the one hand, commercial banks would function in a more traditional way, reinforcing the lending channel ;

whole range of objectives. from the central bank perspective the overwhelming objective is to safeguard financial stability and restore the flow of credit from banks to the private sector. in addition, the measures taken will need to be implemented in a way so as to maintain a level playing field in the eu financial market and minimising the burden to public finances. in line with these objectives, the eurosystem has issued a set of guiding principles for the design and implementation of asset support schemes to address the most critical issues. apart from guidance on the types of assets and institutions that would be eligible to support, these guiding principles call for an adequate degree of risk sharing as a necessary element to limit the cost to the government, to provide the right incentives to the participating institutions and to maintain a level playing field across these institutions. they also mention that schemes with well - defined exit strategies should be favoured and that conditionality may be attached to such schemes. conclusion let me conclude. we face unprecedented challenges. at the ecb we have demonstrated a willingness and capacity to react rapidly to exceptional circumstances. we have cut interest rates sharply to forestall the emergence of downside risks to price stability. we have provided unlimited liquidity support to the banking system so as ensure that liquidity risk does not lead to a systemic crisis. but, ultimately, we alone as central bankers cannot resolve the current financial crisis. the onus is now on governments, supervisory and regulatory authorities, and the financial industry itself, to cooperate to act resolutely to restructure, recapitalise and consolidate the banking system. such government measures are under way. on our side we will continue to do whatever we judge to be necessary and appropriate to maintain price stability and contribute to financial stability. and in doing so we will stick to the principles that have served us well in the pursuit of price stability. we will safeguard our financial independence. we will be transparent and accountable for our actions. most importantly, we will remain faithful to our mandate and provide an anchor of confidence and stability in difficult times.