First, let me thank the organisers of this conference for inviting me to participate in this panel. Indeed, in my view, the title of this symposium, “The euro: its promise and challenge to the world economy”, has been well chosen.
The aim is to provide more reserves than banks wish to hold, with the intention that they will try to dispose of these excess reserves by increasing their lending. This type of activity is usually undertaken only when interest rates have fallen to zero or near-zero levels.