##vyn king ’ s characterisation of a good central banker : “ boring is best ”. bis central bankers ’ speeches but in times of crisis, central banks move into the focus of attention. over the past few years, however, expectations as to what central banks can do and should do have reached excessive levels. no wonder central bankers are today considered to be the new or the real “ masters of the universe ”. as you can probably imagine, i refuse to accept this label. the higher the expectations placed on central banks ’ abilities, the greater the risk of overburdening them. this problem is particularly relevant in the euro area, where the ecb is considered by some to be the only workable institution. however, i agree with my french colleague christian noyer who recently said : “ it ’ s not good to be seen as ‘ the only game in town ’ ( … ). we cannot substitute governments just because their response is believed to be too slow. ” 3. current monetary policy in the euro area the main firewall against overburdening is the central bank ’ s mandate : which is why central banks should stick to it. in the case of the eurosystem, the mandate enshrined in the eu treaties is to maintain price stability in the euro area. the governing council aims to maintain inflation rates “ below, but close to, 2 % over the medium term ”. at the current end, inflation rates in the euro area are significantly below 2 % ; in fact, the most recent inflation figures were negative. without doubt, this puts the governing council in quite an uncomfortable situation. it is clear that an excessively prolonged period of low inflation – or “ lowflation ”, to use the imf ’ s expression – is not harmless : it could put a strain on the sustainability of private and public debt in some countries and make the economic adjustment process in countries with losses in competitiveness more difficult. however, it is worth underscoring that this is an admissible argument in monetary policy discussions only insofar as it impacts on price development over the policy - relevant horizon. and i am quite sure that for most of you, it was quite clear that the governing council had to react – and that the governing council decision three weeks ago to launch a sovereign bond purchase programme, or qe, was the only logical response. the question you have presumably been asking yourselves is this : why the ongoing discussion in the council about a monetary policy instrument

bis central bankers ’ speeches euro area ’ s banking sector, making the ecb one of the biggest banking supervisors in the world. taking banking supervision from the national level to the european level has three specific benefits. first, it introduces more harmonised supervision standards. under the ssm, european banks will be supervised according to the same high standards. these standards will be developed by sharing experiences across borders and cherry - picking the best practices from national approaches to banking supervision. the second point is that the ssm will effectively supervise banks in a truly cross - border manner. although home - host collaborations and supervisory colleges for international banks have existed for some time, they are no substitute for genuine cross - border supervision. european supervision will provide precisely this because only one supervisor is in charge and is really in possession of the full picture. this is essential today because large banks are usually internationally active. third, transferring banking supervision from the national to the european level will put greater distance between supervisors and the banks they supervise and therefore minimise any home bias. therefore, european banking supervision will reduce the likelihood of national supervisors affording preferential treatment to “ their ” banks, thus contributing to prudential transparency. despite all the advantages that european banking supervision offers, you may be under the impression that europe has entered into uncharted territory by transferring responsibility for banking supervision to the ecb, an institution with no previous experience in supervising banks at all. be assured that this is not the case. national supervisors continue to play an important role in supervision within the single supervisory mechanism. responsibility for supervision lies with so - called joint supervisory teams. these teams are headed by ecb staff, but mainly consist of national supervisors. and i must say that our experience during the first months of the ssm has been quite positive. as i pointed out earlier, establishing the single supervisory mechanism is only the first pillar of the european banking union. banking supervision cannot and should not prevent individual banks from failing – either at the national level or at the european level. the possibility of failure is an essential element of a well - functioning market economy. nonetheless, one lesson we learned from the financial crisis is that the failure of very large or interconnected banks could lead to a systemic crisis. thus, as i have already mentioned, solving the “ too big to fail ” problem is crucial in order to make the financial system more stable and save taxpayers ’ money. and this is where banking supervision has to be flanked by other measures and where the second pillar