the idea that the ecb is a place of confrontation between various national interests, represented by various nationalities and various national central bank governors. the maastricht treaty asks all of us to decide in the interest of the euro area as a whole and to forget about reasoning on the basis of a national vision. our present concept is fully in line with this very important treaty instruction. let us not forget that, from this standpoint, we are in a very different situation to that of the united states or the united kingdom. there is no central bank governor in the united states or the united kingdom equivalent to the governing council. the united states is not made up of twelve sovereign states sharing the same currency. third, we publish our diagnosis in real time and we provide a press conference so that all the arguments that have led us to our decision are known in full by the public. finally, empirical works - in particular by artus and wyplosz - have shown that we have been highly predictable in our decisions - even more than some other very influential central banks. this demonstrates that our present concept does not in any respect undermine predictability, which is one of the major ultimate goals of transparency. let me now focus on some elements of our monetary policy concept. to start with, i would like to stress something which is essential in order to understand all that we have done over the past five years : we were asked to deliver a new single currency that would be at least as good as each and every national currency. it was a solemn promise made to 306 million fellow citizens of europe. it was the necessary fundamental feature of a smooth transition to the euro. had this promise not been met, quite a number of people in europe would have seen their market interest rates rise at the moment of transition, and they would have rejected it. so it was undoubtedly necessary. but, at the same time, it was also extraordinarily demanding. it was extraordinarily demanding because it called for the euro, from day one, to be as credible, as confidence - inspiring and as good a store of value as the best national currencies were before the introduction of the euro. and this had to be attained, not only on a short - term basis, but also on a five - year, ten - year, thirty - year basis … we succeeded in delivering, to the benefit both of the euro and of 306 million fellow citizens, the best yield curve available in the euro area before

academics began to study the interaction of house prices and collateralised household borrowing with business cycles or monetary policy. they chose to explore how housing – in its twin role as a consumption good and as a collateralisable asset – influences asset pricing, portfolio and consumption - saving choices. but let me now give you some concrete examples of stijn van nieuwerburgh ’ s timely and significant research. of the wide range of topics covered in his studies, i shall concentrate on housing markets and other sources of systemic risk, which are key inputs into macroprudential policy. let me begin by referring to one of stijn ’ s earliest research papers from 2005 on housing as a collateral good, published in the journal of finance. in this study, stijn, together with hanno lustig, describes how housing can affect asset returns and may thus spread to other markets. 4 the authors explore the role of housing as a collateral asset in a model of limited commitment. when housing collateral is scarce, i. e., the ratio of housing wealth to human capital wealth is low, their model predicts that households are less keen to take on financial risks, and therefore demand a higher return for bearing these risks. using us data, they show that a decrease in housing collateral is followed by higher future stock returns. stijn and co - author thus highlight an important channel through which housing affects stock returns, namely through its 1 / 3 bis central bankers'speeches role as a collateral asset. this result stresses the relevance of housing market surveillance because developments in these markets can have a broader impact on asset markets. with respect to the role of housing as a business cycle driver, a very significant piece of work is stijn ’ s most recent research, forthcoming in the journal of political economy and jointly written with jack favilukis and sydney ludvigson. 5 stijn and co - authors study the impact of changes in housing collateral constraints as well as foreign capital inflows in a general equilibrium model. housing provides utility to households but can be used as collateral in debt obligations. the authors find that financial market liberalisation, seen as an economy - wide relaxation of collateral constraints, such as lower down payments, can create a boom in house prices relative to housing fundamentals. this result has highly relevant policy implications. in fact, macroprudential policy aims to address excessive leverage through capital - based measures affecting banks ’ balance sheets, but also through borrower -