policy and, in particular, monetary policy doctrines in the longer term. certain trends can nevertheless be discerned. let me first briefly recount the various stages passed globally on the way to the current division and definition of economic policy responsibilities. following the experiences of the 1930s and the war - time command economy, monetary policy was, for several decades to come, integrated within the coordinated approach to general economic policy, and the focus of monetary policy was shifted away from maintenance of price stability ( under the gold standard ) towards aggregate demand management, ie towards a policy aiming at full employment and rapid growth. the theoretical foundation of this approach was derived from keynesian macroeconomics. the result was a significant loss of central bank independence, which in the united states happened as early bis central bankers ’ speeches as 1933 as a part of roosevelt ’ s new deal policies, and in the united kingdom and france immediately after the war, when the bank of england and banque de france were nationalised. new policy instruments emerged as central banks were assigned broad regulatory powers over foreign capital movements, retail banks ’ interest rates and the investment of banks ’ asset portfolios. financial market regulation was tightened, but there was little need for active financial stability policy as understood today, given the high level of stability of banking systems overall. occasional balance - of - payment crises still took place, however. this regime, which had became established after the second world war, nevertheless hit a wall in the 1970s. inflation accelerated to two - digit rates in all leading industrial economies ( except for germany ), while unemployment surged to levels higher than ever recorded since the 1930s. the situation grew unsustainable to the point of prompting a fundamental reassessment of economic policy in all western economies by the early 1980s. the lesson learnt from the 1970s inflation and the measures to curb it in the following decade was that monetary policy has its own special role to play in the context of economic policy. its most important function is to maintain confidence in the value of money. failing this, monetary policy cannot make an effective contribution to any other economic policy objectives such as sustainable growth and employment. the redefinition of the functions of monetary policy was, on the one hand, conditioned by the advances in economic theory and, on the other hand, by german monetary policy experience. in economics, a greater emphasis was given to the role of expectations in the inflation process. germany, whose central bank enjoyed an exceptionally high level of independence, weathered the storms of

of macroprudential policy beyond the banking sector. at least over the medium term, the covid - 19 pandemic is likely to accelerate trends that call for extending the reach of macroprudential policy to a larger set of financial institutions and financial transactions. as a case in point, digitalisation provides opportunities for new players, and non - banks may take a larger role in financial intermediation. to protect financial stability, macroprudential policy should be adjusted to also cover the systemic risks created by non - bank finance. over time, digitalisation may also boost cross - border banking and the provision of cross - border financial services, thus increasing the contagion channels of systemic risks between financial systems. this increases the importance of cross - border cooperation between macroprudential authorities, which should be systemically enhanced. related to digitalisation, let me recall that a number of central banks, including the ecb, are actively examining avenues to develop and adopt a central bank digital currency, or cbdc for short. on specific areas of concern, both residential and commercial real estate markets have often been a significant source of systemic risks and vulnerabilities. the pandemic is likely to have lasting but very diverse effects on real estate markets. therefore, a comprehensive analysis of the macroprudential risks on real estate markets and appropriate tools for addressing them would be most needed. in addition to state - of - the - art analytical methods and policy tools, macroprudential policy needs a strong institutional framework to operate effectively. in its early recommendation1 the european systemic risk board proposed clear mandates for macroprudential decision - makers, cooperation between relevant authorities, as well as a leading role for the central bank in macroprudential policy – irrespective of the specific institutional structure. importantly, as already noted by the imf some years ago2, the framework should be able to counter inaction biases that could arise because of lobbying or political pressures. the framework should ensure access to sufficient information and promote effective cooperation in risk analysis. survey results published recently by the czech national bank3provide interesting information on the views of academic and professional experts on macroprudential and monetary policy. according to the survey, sharing of data and knowledge and the capacity to act swiftly are key benefits of a framework in which the central bank conducts both monetary and macroprudential policy. however, further research on the institutional arrangements of macroprudential policy would