- pillar approach to policy - making. but note the difference between a monetary pillar and a genuine “ lean - against - the - wind ” attitude, as was advocated by the early participants in the debate that i was mentioning before. it was discussed in a recent ecb paper. 7 it is not asset prices per se that a central bank should incorporate in its policy framework. after all, the equilibrium value of assets – particularly real assets, such as claims on companies and houses – is difficult to compute and is certainly state - contingent. so, there is little merit in an unconditional monetary policy response to asset price changes. the policy response should be conditional. and the critical condition that a central bank should ascertain before judging if an asset price trend is policy - relevant is whether the market trend is causing – and / or is being fed by – a concomitant monetary imbalance. a market bubble that progresses in symbiosis with a credit bubble, and which then spills over into excess money creation, is certainly a policy - relevant event. being alert to the monetary imbalance means for a central bank being better able to discriminate between benign and less - benign phenomena in financial markets. this being said, monetary policy needs support in its ex ante action to resist the formation and build - up of toxic financial imbalances. there is a clear need for a corresponding policy framework to foster financial stability ; we need to understand how it interacts with monetary policy in order to minimise frictions between the two and exploit possible synergies. 2. macro - prudential policies and monetary policy decisions the goals of macro - prudential policies can be broadly defined as preserving financial stability by reducing the pro - cyclicality of the financial sector, and improving its resilience to adverse shocks. however, even though the goals are clear in theory, the means to reach them are still open to discussion. monetary policy has been at the centre of the debate in economics for almost a century, and there is now a high level of consensus about its goals, its tools, and how to gauge its effectiveness. however, the macro - prudential framework is still fuzzy, and being developed with the benefit of hindsight after the crisis that started in 2007 with the bursting of the subprime bubble. i will describe briefly the main tools that are being developed, dividing them into those that address pro - cyclicality and those that attempt to improve resilience

include the range and quality of the products a country exports. in this regard, countries in the euro area can take advantage of their high technological advancement and well - educated labour forces. they should be producing higher quality and more sophisticated goods, and redirecting their exports towards strongly growing markets. against this background, the domestic environment in which firms operate is central to fostering competitiveness. countries whose firms compete successfully in international markets are in general those with better technology, a higher degree of openness and greater domestic market competition. a growing body of cross - country evidence confirms that policies to promote competition in europe ’ s markets for goods and services clearly raise the potential for growth and job creation at little or no cost to the public purse. continued efforts to promote stronger competition and further market integration within europe are important tools for enhancing the global competitiveness of european firms. in this vein, supportive national economic environments – including well - conceived physical and social infrastructures, sound public finances and, i should emphasise, stable financial systems – will all contribute to the competitiveness of the euro area. let me go a little deeper into the challenges of competitiveness for europe ’ s economy. for the euro area, we have to distinguish between two distinct concepts : the external competitiveness of the euro area as a whole in the global economy ; and the internal competitiveness of the various countries within the euro area. bis central bankers ’ speeches external competitiveness let me start with external competitiveness. the euro area has actively contributed to the rise in international trade that is one of the defining features of globalisation. in the last two decades, the openness of the euro area has increased markedly. in the mid - 1990s, exports of goods and services from the euro area as a whole to the rest of the world were equivalent to 15 % or less than one sixth of gdp ; now they amount to 23 % or nearly a quarter of gdp. even though we are roughly comparable in size to the united states, the euro area is about ten percentage points more open, and we are much more open than japan despite our larger size. this also means that we have ample evidence that any fears of a “ fortress europe ” were completely unfounded. on the contrary, we are the most open of the largest economies. external performance in terms of the current account shows that the euro area as a whole has performed well, and that external imbalances have been kept in check. the euro area ’ s current account has traditionally been