that without this moral hazard behaviour induced by the harmonisation of the dgs rules the impacts on the system would not have been so pronounced. or take another example. the regulatory debate on financial benchmarks in the world ( and within the eu ) influences sometimes adversely the willingness of banks to contribute to the benchmarks also in the markets where no improper behaviour of contributors has been proven or even detected so far. so it is great to harmonise and to coordinate. but you always have to bear in mind that you should not harmonise and coordinate towards rules that are riskier than the previous uncoordinated rules were on average. the third constraint is the one claudio borio of the bis calls the “ time inconsistency of financial stability policies ”. he says : “ policies that are too timid in leaning against financial booms but that are then too aggressive and persistent in leaning against financial busts may end up leaving the authorities with no further ammunition over successive financial and business cycles ” 1 yes, this is the case in many countries, including the czech republic now we have reached the zero lower bound. so, to put it more bluntly : the problem also might be that we central bankers are sometimes more procyclical and less symmetric in our thinking than we should be. and the fourth constraint is our own disbelief in the power of monetary policy. our experience – even in a small open economy – is that autonomous monetary policy can be very much of help, if not key, in stabilising the general macro - environment compared to the situation where monetary policy is just being passively accepted from abroad. and i say that despite the fact that inflation stabilisation in the current circumstances is a necessary but not sufficient condition for long - term financial stability. as the debate today shows, what this sufficient condition for long - term financial stability is, is not entirely clear and remains to be determined. but i would tend to believe that if there is any way forward in the area of financial stability, monetary policy will have to play an absolutely key role – a bigger role than many now think or admit. thank you. borio, c. : monetary policy and financial stability : what role in prevention and recovery?, bis working paper no. 440, january 2014 bis central bankers ’ speeches

miroslav singer : czech central bank head sees lowered risk of deflation – interview in the wall street journal interview with mr miroslav singer, governor of the czech national bank, in the wall street journal, conducted by paul hannon on 11 october 2014. * * * the threat of a slide into deflation or a long period of very low inflation in the czech republic has diminished, the head of the country ’ s central bank said saturday, although he intends to maintain the weak - koruna policy at least into the start of 2016. in an interview with the wall street journal during the annual meetings of the international monetary fund in washington, miroslav singer said he had been encouraged by the stimulus measures announced by the european central bank since june, since he had expected it to take longer to react to very low inflation rates. mr. singer also said that he was confident the central bank could bring its weak - koruna policy to an end without risking a “ snapback, ” or a sharp strengthening of the currency. the czech republic is a member of the european union, but has chosen not to use the euro. it does have close economic ties to the currency area and particularly germany. as a result, low growth and low inflation in the eurozone have been a big problem for the central bank. mr. singer said that while the central bank remains worried about the possibility of another “ hiccup ” in the eurozone, he is less concerned than he was before the ecb first indicated in may that it was preparing to take action. “ the outcome was more positive than i would have expected five months ago, and things look less gloomy than they appeared before they ( ecb policy makers ) found some consensus, ” he said. the eurozone ’ s persistent economic weakness has been the main concern for policy makers gathered here over recent days. those concerns were heightened by a run of very weak data from germany that indicated the economy may have contracted for a second straight quarter in the three months to september. mr. singer believes those figures from august that recorded large falls in industrial production, manufacturing orders and exports are not reflective of the underlying state of the german economy, but instead the fact that there was a larger number of holidays than usual taken during that month. he said the czech economy, which has a similar focus on industry rather than services, had experienced similar volatility in output over the summer months. “ i would be unpleasantly surprised if the weakness in germany continues, ”