Supply liquidity to ensure financial market stability  Second, the central bank should supply liquidity flexibly in response to the financial market turmoil which may arise in the course of restructuring. It is quite common for the financial market to become destabilized during the process of structural adjustment due to high credit risks and reduced trust among market participants.
Nothing is inevitable or predetermined, there is no room for fatalism’.21 The importance given to technical diagnosis aligns Ciampi with the tradition of the Bank of Italy, where he himself once said he received his ‘Masters in Economics’.