of the governing council against it? trichet : i never comment on the statements of other members of the ecb ’ s governing council. i will only say this much : an overwhelming majority were convinced that the decision was right under the circumstances. faz : in comparison with almost every other major currency, the euro has fallen sharply this year. is this a risk for price stability? trichet : the euro is a credible currency. the fact that it is a currency whose rate of inflation has been below 2 % for over 11 years demonstrates its trustworthiness. price stability is a key feature of the euro and a major asset for domestic and international investors. faz : so there is no need for intervention? trichet : i never comment on interventions. faz : the crisis stems from excessive debts. we are now fighting the crisis with even more credit and even more money. how do we get out of this spiral? trichet : we have a number of ways of providing the banks with additional liquidity support, which will automatically be discontinued when the situation improves. owing to the serious tensions observed very recently in the markets, we have now reintroduced some of these support measures. but you can be sure that we will exit those measures in a timely fashion in line with improvements in the functioning of the markets. we will never lose sight of our primary mandate of ensuring price stability over the medium term, with the right monetary policy stance. there is a clear separation here. by the way, note that the growth of the monetary aggregate “ m3 ” is currently negative. i have been committed to price stability all my life. for me, inflation is a tax that would mainly hit the poorest and weakest in our society. faz : the purchase programme seems like a second major bailout. are we rescuing the banks again? trichet : we are constantly urging the banks to live up to their responsibilities. all our support for the banking sector is geared to stabilising the real economy in the financial crisis in order for price stability to be ensured and, by way of consequence, for jobs to be retained. we are therefore calling on the banks to strengthen their balance sheets and lend. they should not use their profits for huge bonus payments or excessive remuneration packages, which are a disgrace in the current environment, nor to massively distribute their profits. instead, the banks should do everything they can to strengthen their capital base in order to be able to better provide credit to businesses. fa

the hands of governments and regulators. against this background, monetary policy measures in a crisis can serve a critical role in guarding against disorderly self - fulfilling disruptions. they can buy time for other policy domains to undertake the necessary adjustments and reforms. but they cannot substitute for such actions. they must also be mindful of adverse longer - term consequences of short - term support provided. here is my “ to do ” and “ not to do ” list on monetary policy in crisis times, expanding a little on bagehot. • provide liquidity, not solvency support. recapitalization is the task of shareholders and governments. for early expositions of the need for a medium - term stability - oriented monetary policy to take into account the build - up of financial imbalances, see o. issing, “ why stable prices and stable markets are important and how they fit together ", first conference of the monetary stability foundation, 5 december 2002 and o. issing, “ monetary and financial stability : is there a trade - off? ”, bank for international settlements, march 2003. bis central bankers ’ speeches • prevent disorderly deleveraging and fire sales of assets, do not delay unduly necessary balance sheet adjustments. • provide temporary backstop to markets under stress, do not replace market functioning for too long. • provide short - term liquidity support, do not enter long - term credit allocation to be left to financial intermediaries. • act as lender of last resort to the banking system based on the traditional role of central bank refinancing, do not confuse this with lolr to governments or inappropriate fine - tuning of financial markets. • support functioning monetary transmission mechanism ( via banks and markets ), do not guarantee uniform financing conditions or suppress fundamentally justified risk premia. • preserve singleness of monetary policy, do not compensate need for political commitment to keep composition of currency area intact. • buy time and pre - empt self - fulfilling dynamics ( tail risks ), do not distract from need by other policy domains to undertake structural reforms and address underlying fundamentals, avoiding wrong incentives and moral hazard. • fulfil the duty of fire - fighting in crisis to preserve financial and ultimately price stability, but keep a medium - term perspective and do not neglect unintended consequences and adverse side - effects from protracted non - standard measures on financial institutions and functioning. • take responsibility and credit for averting armageddon, but do not overstate