4  BIS central bankers’ speeches  What then must be done? The debt-ceiling fiasco in the United States and the inability, to date, of European policymakers to get ahead of their crisis have reduced investor confidence in the effectiveness of policy. The combination of high debt loads and unpredictable politics is toxic.
Still, it is important to distinguish between the willingness to act and the ability to address the current challenges. There is much that policy can do. The European situation is fragile but fixable; manageable if it is managed. The European Central Bank stands ready to supply virtually unlimited liquidity to European banks.