However, the crisis has brought to the forefront severe inconsistencies in the governance model, internal organisation and instruments available to manage the single currency. BIS central bankers’ speeches  1  The initial response of European leaders has been slow and hesitant, but in the past few months, important steps have been taken towards a more balanced EMU governance model and effective “firewalls”.
[32] This is another key lesson of the 1970s. If the public expects central banks to lower their guard in the face of risks to economic growth – that is, if they abandon their fight against inflation prematurely – then we risk seeing a much sharper correction down the road if inflation becomes entrenched.