These measures needed to be implemented rapidly and central banks were in an advantageous position for acting swiftly due to their vicinity to financial markets, their operational framework and their clear and independent decision structure. But these measures ultimately have their limits in terms of effect and legitimacy. The risk of undermining the primary mandate of central banks needs to be taken into account. Yet, I will argue that indeed crisis management and, hence, the preservation of financial stability is an integral part of our role as central bank, serving ultimately to fulfil our mandate. The Treaty commits the ESCB primarily to maintain price stability in Article 127/1 and confers the task on the ESCB to contribute to the stability of the financial system in Article 127/5. Our mandate is clear, it is comprehensive, it is adequate and it should not be questioned. Clearly, central banks should not be overburdened. In the ECB’s case, short-term stabilisation measures were important and necessary. However, structural problems require a structural response. These deficits need to be addressed by reinforcing the available policy instruments outside the purview of the central bank. The work for the report by the four presidents of the European Council, the Commission, the Eurogroup and the ECB, which will be submitted to the Heads of State and Government at the end of this year, is an important step to address the economic misalignments and institutional shortcomings in the euro area.
5  1  An additional element has been exchange rate targeting which was based on an external anchor. Effectively, this represents an intermediate objective if domestic credibility of the central bank may be weak. 2  See Greenspan (2002), Blinder (2005), Mishkin (2007) and Bean, Paustian, Penalver, and Taylor (2010), “Monetary Policy after the Fall”, Federal Reserve Bank of Kansas City Annual Conference, Jackson Hole, Wyoming, August. 3  See the discussion in Christiano, Ilut, Motto, and Rostagno (2010) on “Monetary policy and Stock Market Booms.”  4  See “A Monetary Policy Strategy in Good and Bad Times: Lessons from the Recent Past” Fahr, Motto, Rostagno, Smets and Tristani, ECB Working Paper Series No. 1336, May 2011. 5  See the evidence in Fischer, Lenza, Pill and Reichlin (2008): “Money and monetary policy – the ECB experience 1999–2006” and Trichet (2008): “Risk and the Macro-economy”, Keynote address at the conference “The ECB and its watchers X”. 2  BIS central bankers’ speeches  Nonetheless, I think it is fair to say that nobody – including central bankers – has expected a crisis of the dimension that we have been experiencing since five years. 6 The overall favourable macroeconomic constellation from the Great Moderation, with low volatility and robust growth, has certainly induced some benign neglect – also on the policy side.