de facto limits on omt – through the esm and the bundestag. cœure : i really don ’ t want to speculate on such ideas, this is an unchartered territory. bis central bankers ’ speeches klass knot of the dutch central bank has said that omt could last at least for 10 years because it would take at least a decade for euro - area countries to reduce their debt ratios substantially. cœure : omt is a very narrow instrument targeted at a very specific type of risk, which we call the redenomination risk. meaning : the risk of markets wrongly expecting countries to leave the euro area. there is only a low probability that omt will be used, but it will stay with us. i also don ’ t see any reason for changing the conditionality. it is as it is. now it ’ s for the countries to decide whether they want to apply or not. ireland will ask for a precautionary credit line from the esm to safeguard the return to the capital markets. would it be possible for the ecb to activate omt and buy bonds before such a credit line is drawn? cœure : once the eurogroup has agreed on an appropriate programme, the ecb ’ s governing council can activate omt. the credit line doesn ’ t have to be drawn. but the governing council will make this decision in full independence. there is another issue i would like to discuss with you : the collateral framework of the ecb. in the recent past there have been several problems with national central banks being too lax with regard to the eligibility and valuation of collateral. cœure : the ecb and the eurosystem is unique in the sense that we operate in 17, soon 18, countries, across very different legal frameworks, contractual standards and market structures. this creates complexity. we have to ensure a level playing field across all countries. at the same time market structures are constantly changing. and to put it bluntly : there is a risk that market participants try to circumvent our rules. and what is the consequence? cœure : first : we need a strong will within the governing council to make sure that our rules are enforced in a consistent way. i see this will. and second we constantly have to monitor market developments and adapt our framework so that market participants cannot game it. nagel : the single collateral framework must be understood and applied the same way by all

alan greenspan : jackson hole conference - closing remarks closing remarks by mr alan greenspan, chairman of the federal reserve board of governors, at a symposium sponsored by the federal reserve bank of kansas city, jackson hole, wyoming, 27 august 2005. * * * the federal reserve will almost surely face as many uncertainties over the next eighteen years as it has over the past eighteen. technology continues to bring rapid change and, hence, considerable uncertainty, to the global marketplace. monetary policy, supervision and regulation activities, and payments system operation will need to be calibrated to respond to the influences of that technological change. other forces will be at work on the economic environment as well. the inexorable aging of our population will markedly influence the policy milieu in the years ahead. monetary policy, for example, cannot ignore the potential inflationary pressures inherent in our current fiscal outlook, especially those that could arise in meeting commitments to future retirees. however, i assume that these imbalances will be resolved before stark choices again confront us and that, if they are not, the fed would resist any temptation to monetize future fiscal deficits. we had too much experience with the dangers of inflation in the 1970s to tolerate going through another bout of dispiriting stagflation. the consequences for both future workers and retirees could be daunting. nearer term, the housing boom will inevitably simmer down. as part of that process, house turnover will decline from currently historic levels, while home price increases will slow and prices could even decrease. as a consequence, home equity extraction will ease and with it some of the strength in personal consumption expenditures. the estimates of how much differ widely. the surprisingly high correlation between increases in home equity extraction and the current account deficit suggests that an end to the housing boom could induce a significant rise in the personal saving rate, a decline in imports, and a corresponding improvement in the current account deficit. whether those adjustments are wrenching will depend, as i suggested yesterday, on the degree of economic flexibility that we and our trading partners maintain, and i hope enhance, in the years ahead. on monetary policy, i envision a continuous refinement of our risk - management paradigm. i presume maximum sustainable economic growth will continue to be our goal, with price stability pursued as a necessary condition to promote that goal. to date, we have chosen not to formulate explicit inflation targets, in part, out of concern that they could inhibit