I will outline the global roots of the crisis, and in particular how a lack of coordination of international policies was inspired precisely by the “put your house in order” approach to international cooperation. Insufficient cooperation was evident in a number of areas. There were, for instance, supervisory and regulatory inconsistencies involving systemic players as well as a lacklustre policy response to global imbalances.
Reserve holdings will be remunerated up to the required reserve level, at the rate of the ESCB’s main refinancing operation (as averaged over a month). It may be argued that a less than full remuneration of minimum reserves would increase the interest rate elasticity of central bank money demand.