The difficulty is compounded because the reasons for the behavior that leads to heightened potential impact of a low-probability event often are not fully understood - for example, why the markets cracked or why the economy has not responded more strongly to previous stimulus.
EMU must achieve the same effect through its economic governance framework. The recognition of this requirement was certainly behind the recent proposal presented by President Trichet for the creation of a European Finance Ministry. We know from the crisis, and from learning-by-doing, that soft rules will not achieve the desired outcome.