to the global financial crisis and the changing world around us. our responsibilities are heavily intertwined. the breadth of our mandate gives us both strength and insight, enabling the bank to harness its collective, wide - ranging and deep policy and technical expertise to tackle complex issues. most of the areas we are responsible for – whether consumer protection ; prudential regulation ; payments, settlements and currency ; or providing economic analysis and statistics – have complex interactions with each other. i see our job, along with other members of the central bank commission, to ensure this is all brought together. i also have personal responsibility to the eurosystem in terms of our primary mandate of price 1 / 5 bis central bankers'speeches stability, which – at its heart – is essential to intergenerational wellbeing, enabling governments, business and citizens to plan, invest and make provision for the future. aligned to that is the eurosystem ’ s secondary mandate of supporting ‘ the general economic policies in the union with a view to contributing to the achievement of the objectives of the union ’. the european and euro area post - crisis institutional architecture for economic policy and financial regulation and supervision has changed and continues to change. the ongoing evolution will continue to require us to be closely engaged and influential in eu and international fora. i have been struck by how committed the staff in the central bank are to working in the public interest. this resonates with my own values and i am confident that we have a strong basis on which to deliver our mission. but as well as building on our strengths, we also need to maintain a sense of humility and an openness to be challenged : the financial system is changing rapidly and future challenges and crises will be different to what went before. from a delivery perspective, we must ensure we are using our resources effectively and efficiently. as the world around us changes, we need to evolve and strengthen as an organisation, consistently seeking to be best - in - class. that means regularly assessing and examining our policies, frameworks and approaches to ensure they are fit - for - purpose. diversity of thought is a critical component in this, in order to give us the capacity for deeper insights and make us more resilient. more generally, from my early engagements with various stakeholders, and in preparing for this hearing, i recognise a desire in some quarters for the central bank to move faster on certain issues. i understand that. i certainly want us to be on the front - foot in our

and less room for manoeuvre. in the last three years the crisis has increased the government budget deficit for the advanced countries as a group by over 6 percentage points of gdp and the public debt by almost 25 points to almost 100 per cent of gdp. in the united states and japan fiscal consolidation can hardly be put off any longer : the oecd considers that just stabilizing the debt ratio of these two countries within the next fifteen years would require a correction of the primary budget balance on the order of 8 – 9 percentage points of gdp. in europe we are already working to reduce the imbalances in the public finances. the strains that affected the bis central bankers ’ speeches sovereign debt of some of the euro - area countries have focused attention on the risks of prolonged imbalances. the euro area ’ s budget deficit is expected to improve sharply this year from 6. 3 to 4. 6 per cent of gdp according to the european commission ’ s latest estimates. the debt ratio is likely to rise further, but much more slowly than in the last two years. in italy the ratio of public debt to gdp, close to 120 per cent, should begin to decline next year, when the government intends to bring the deficit down to below 3 per cent of gdp. in the ten years preceding the crisis, current expenditure, net of interest on the public debt, grew by 4 per cent per year in nominal terms, far outpacing gdp. last september ’ s public finance decision forecasts that its increase will be limited to 1 per cent per year in 2011 – 12. this trend must continue beyond 2012 and the composition of primary expenditure must be geared to growth. there is no other way to reduce the deficit, since the burden of taxes and social security contributions is already 3 points above the euro - area average. additional revenue that comes in as a result of the reduction of tax evasion should be used to ease the burden on the taxpayers who already pay what is due. it may also be necessary to offset at the central government level any increases in decentralized taxation caused by fiscal federalism. the financial aid that greece and ireland received last year from the european union and the imf was conditional on their enacting strict fiscal consolidation plans and incisive economic and institutional reforms. a major contribution to preventing new sovereign debt crises should come from the reform of european governance now under discussion, which aims to strengthen multilateral surveillance of national economic policies. it is important that semi -