, two - thirds of external financing – and even a larger share for small - and medium - sized enterprises – originates from banks. our measures included the provision of unlimited funding support to banks at maturities up to three years, the extension the japanese experience since the 1990s was widely seen as an exception. although it helped understanding the potential risks and developments during the crisis, it did not serve to identify the imminence and the depth of the global financial crisis. in greece it were public finances that placed a burden on the domestic banks. in a later stage, due to the deteriorating valuations of greek sovereign bonds, financing of the government become more difficult due to impaired bank balance sheets. bis central bankers ’ speeches of the list of eligible collateral, and outright purchases of covered bonds and debt securities through the securities markets programme. the two long - term refinancing operations ( ltros ) with a maturity of three years implemented in december 2011 and february 2012 allowed banks to satisfy their additional liquidity needs. they relaxed banks ’ funding constraints and – owing to their long maturity – addressed impairments in the monetary policy transmission mechanism to longer rates. beyond the direct effect of averting a major credit crunch, the full effects of the three - year operations will unfold over time and may be gauged only as time proceeds due to the usual lags in monetary policy. the securities markets programme was initiated back in may 2010 and offered necessary support to the monetary transmission but did not address the incentives for governments to engage in the necessary reforms and to rebalance their public finances. while the smp counts for a significant share of the ecb ’ s balance sheet, it did not stabilise the situation in a sustainable way. in addition, the smp had unintended side effects such as a perceived preferred creditor status of the ecb vis - a - vis other creditors. the governing council therefore decided last thursday to terminate the smp. nevertheless, the current situation in sovereign bond markets continues to be characterised by a ) heightened aversion of non - resident investors to hold sovereign bonds of some euro area countries, b ) extreme illiquidity and yield volatility in these bond markets and c ) widespread concerns over redenomination risks. this all reflects a general fragmentation in financial markets ; but excessively high and volatile risk premia hinder the effective working of monetary policy. in this environment, monetary policy signals do not reach all parts of the euro area in the same way

##t do not impinge on the status of private investors. the aim of the programme is to accompany countries and their sovereign to regain stable access to capital markets. • the programme focuses mainly on the shorter end of the yield curve and in particular on sovereign bonds with a maturity between one and three years. steering short - term market rates falls squarely into the realm of monetary policy. the interventions address disorderly market conditions and are aimed at reducing excessive market volatility. • the governing council will monitor the conditions for interventions based on a large set of indicators and will assess their effectiveness to decide on the continuation of interventions. i am convinced that the new elements in sum make the omt a much better programme than the smp previously was. this new programme is a clear example of how far the ecb fulfils contemporaneously the role as a stability guardian and as crisis manager. by guarding the stability of the euro in the entire euro area and countering redenomination risks, the ecb plays a central role in managing expectations in the crisis. a question remains : what will be the role of central banks after the crisis? the role of central banks after the crisis from a central bank ’ s perspective three lessons can be drawn that appear to be crucial for its future role in crisis prevention and resolution. first, in a financially integrated market like the euro area, contagion risks are large with financial instability rapidly spreading to other market segments. second, the sudden materialisation of financial instabilities can lead to strong recessionary forces that carry downside risks for medium - term price stability. this has taught policy makers that “ cleaning ” rather than “ leaning ” against financial imbalances can simply become a very costly strategy. and third, a stable macroeconomic environment with stable prices – though being a necessary condition – is not a sufficient one for the preservation of financial stability. neither the implemented “ ex - ante ” policy measures by national authorities nor those by central banks were enough to deal with the build - up of risks and imbalances that led to the current crisis. so, what does this imply for the future role of central banks as stability guardians and their role as crisis managers? the future role of central banks : financial stability and supervision the importance of financial stability for central banks has been acknowledged in the european treaty. article 127 / 5 reads : “ the escb shall contribute to the smooth conduct of policies pursued by the competent authorities relating to the prude