review. greek banks currently seem to be operating like “ zombies ”. do you think this will change after the recapitalisation? the key aim of the recapitalisation is to enable these banks to function normally and to be in a position to support the economic recovery in greece by providing credit and other financial services. robust capital and liquidity positions are necessary conditions for achieving this objective, which is why the process of bank recapitalisation and its smooth implementation are so important. given that the upcoming recapitalisation will involve significant amounts of public money, it is critical that banks are controlled by highly professional boards complying with state - of - the - art governance standards. this will also ensure that the state funds used for recapitalising banks can be recouped via privatisation. having said this, further measures are needed for banks to remain sustainable in the longer term. in particular, banks will have to intensify their efforts to resolve the high levels of bad or so - called non - performing loans and the relevant authorities will need to remove the remaining obstacles hampering progress in this area. naturally, some other conditions are also important, for example, the lifting of capital controls and the country ’ s renewed access to international financial markets. we are talking about a series of positive steps, including structural reforms, which are required for greece to resume a path of sustainable growth and higher employment. is a bail - in of depositors completely off the table? the ecb insisted that a bail - in of depositors should be excluded, as it deemed any such measure to be counterproductive for the economic recovery and harmful for the greek economy. it would have had a very negative impact on the private sector. the eurogroup accepted our viewpoint. it is essential that the greek authorities move ahead swiftly with the implementation of the agreed financial sector measures so that the recapitalisation exercise can still be finalised this year. its completion will be an important step in the effort to restore depositor and market confidence in greek banks. the prime minister, and also some ministers, have talked of trying to renegotiate part of the programme. is there any scope for this or is this a move that could backfire? the memorandum, which was supported by the greek parliament, was agreed with the authorities in august. i believe it is in the interest of everyone that the focus should now be on quickly implementing the measures that were jointly agreed, in line with the

as certainty is always elusive. one example of this may come from the recent evolution of monetary policy conduct in chile. at our presentation before this committee last december, we noted that our baseline scenario featured as a working assumption that the monetary stimulus would be boosted by 50 basis points, which would be done in the following months. new information convinced us that such impulse would need to be speeded up, so we took action in our monetary policy meetings of january and march. moreover, the report i am presenting you now uses a mpr trajectory that goes al little further as a working assumption. also, as always, as circumstances change and the medium - term inflation outlook varies, monetary policy will be adjusted accordingly. furthermore, monetary policy and its underlying diagnosis must be persistent enough for it to influence economic decisions regarding saving, investment and pricing, which operate with significant lags. in chile, estimates indicate that it takes from two to eight quarters for a mpr movement to completely pass through to the economy. now, this can vary if economic conditions are complex or the magnitude of the impulse is estimated to be still not large enough. the events in the developed world during recent years provide a good example. after the crisis of 2008 - 2009 the federal reserve increased the monetary impulse beyond the usual limits set by the interest rate. it not only took it to zero percent, but it also added a quantitative boost through the purchase of bonds. in a normal environment, it probably would have been unnecessary to take the impulse to such extremes, and probably the economy would have taken less time to react. however, the post - crisis damage was very large and only the persistence of the momentum has allowed the us economy to make a successful recovery after nine years. we see something similar in europe, with the difference that they took longer to apply the stimulus, suffered a banking crisis in 2011 and, in addition, the very agreement procedures of the european community make it more difficult to take extreme decisions. finally, as i said, monetary policy must be credible, in order for the economic agents ’ reactions to its impulses to be in line with the objective. if inflation expectations are aligned with the two - year - ahead target of 3 %, agents ’ decisions, market interest rates, and financial asset prices will harmonize with low, stable inflation. the need for persistence and credibility raises a warning about how inefficient an interest rate reduction may be if perceived as temporary by the market. this is very important, because in