Let me start with some conceptual remarks before I share my views on some topics of current interest. In times of crisis there is the threat that the short-term benefits of rescue operations are given priority over the long-term benefits of incentive-compatible financial markets. Therefore, maintaining a long-run perspective in crisis management is of the utmost importance for the policymakers involved.
The very existence of suitable – ie, in the long-run, stability enhancing – crisis resolution mechanisms increases the credibility of macroprudential policies. It has a positive impact on market discipline and so contributes to a more stable financial system. Financial crisis management is more effective when it can take advantage of the market forces instead of combating or suspending them.