The Supervisory Board’s decisions are finally submitted, by means of a non-objection procedure, to the Governing Council of the ECB, which is ultimately responsible for their adoption. As regards actions relating to less significant institutions, which the Banco de España supervises directly, the procedures and reports have been progressively aligned with ECB practices, a process that will continue going forward. Finally, and in the same direction of improving our institutional governance, my intention is to continue to foster the collegiate functioning of our governing bodies, and to strengthen the functioning of our committees. There I shall finish and now I remain at the disposal of the House for any questions or clarifications. 13  ANNEX 1 The Banco de España’s participation in the Eurosystem  1 Participation in the European System of Central Banks  1.1 The Eurosystem The Eurosystem is the monetary authority of the euro area and is made up of the European Central Bank (ECB) and the national central banks (NCBs) of the Member States whose currency is the euro, one of which is the Banco de España.1 The primary objective of the Eurosystem is to maintain price stability in accordance with Article 127(1) of the Treaty on the Functioning of the European Union (TFEU). According to this article, the Eurosystem shall also support the general economic policies in the Union. To pursue the fundamental objective of price stability, the Eurosystem has the basic function of defining and implementing the monetary policy.
ensuring price stability. Three main arguments are generally put forward to support this view: -  The first is that central banks have only one instrument at their disposal, i.e. the interest rate, and that this instrument, by virtue of Tinbergen’s Principle, can only be assigned to a single objective, that of price stability. Other means – particularly regulatory or prudential measures – would be better suited to and more effective in ensuring financial stability. But the current crisis demonstrates that central banks actually have several instruments at their disposal. Indeed, liquidity management in periods of financial turmoil needs to be separated from the issue of the monetary policy stance. To put it more clearly, the monetary policy stance simply consists in setting key interest rates at a level consistent with the central bank’s macroeconomic objectives, whilst liquidity management aims to enable the money market, and financial markets in general, to function “normally” so that monetary policy impulses may be efficiently transmitted to the rest of the economy. -  The second argument is policy-based in nature and postulates that monetary stability is a necessary and sufficient prerequisite for ensuring financial stability. The latter would then be a welcome consequence of the implementation of an inflation targeting strategy, which consists in only responding to shocks that have a lasting impact on medium-term price stability.