Institutional capability and independence  On the institutional side, the question is whether a central bank has the institutional status and necessary independence to carry out any action it sees necessary to fulfil its task. The Governing Council has the unfettered capability to take and implement appropriate policy decisions whenever circumstances warrant, given the ECB’s strong institutional independence. This reflects the maintenance of a clear dividing line in the euro area between the central bank and the fiscal sphere of responsibilities. The fact that the ECB has refrained from purchasing government bonds is in line with this institutional framework. This approach avoids any possibly intricate interaction with other policy actors on decisions relevant for exit, and maintains a clear separation of responsibilities between the central bank and fiscal authorities. 4. Reputation to act when appropriate  Any strategy will only be credible if there is no doubt about the ex ante determination of the institution to implement the required actions. This is the fourth cornerstone. From this perspective, the ECB’s determination to act in a consistent way is beyond any doubt. Over the past decade, our institution has established a clear track record of vigilance and reputation for acting in a timely fashion. Let me give only two examples: in December 2005 the Governing Council, on the basis of its monetary policy strategy, acted promptly to address mounting risks to price stability.
Jean-Claude Trichet: The ECB’s exit strategy Speech by Mr Jean-Claude Trichet, President of the European Central Bank, at the CFS conference “The ECB and Its Watchers XI”, Frankfurt, 4 September 2009. * I. *  *  Introduction  Ladies and gentlemen, It is a pleasure to be with you today to participate in this 11th edition of the ECB Watchers’ Conference. I am delighted to see that this conference has established itself so successfully as a venue for interaction between the European Central Bank and its observers. My remarks today come in the context of the ongoing financial crisis, the most severe the developed world has witnessed for more than sixty years. As the Governing Council recognised yesterday, “there are increasing signs of stabilisation in economic activity in the euro area and elsewhere. This is consistent with the expectation that the significant contraction in economic activity has come to an end.” Nevertheless, it would be too soon to call the crisis over. The Governing Council also underscored that uncertainty remains high and that the recovery is expected to be rather uneven. Exceptional times have called for exceptional actions. Faced with the financial crisis, we have introduced a set of non-standard measures, which we call “enhanced credit support”. These measures are intended to prevent the threat of a drastic loss of liquidity in the financial system as a whole and support the flow of credit to firms and households above and beyond what could be achieved through policy interest rate reductions alone.