In fact, central banks contribute to financial stability. But improved coordination and institutional innovations, while necessary, are not sufficient to make the euro area economy more resilient to adverse shocks. To enhance the adjustment capacity of the euro area economy, the current situation should serve as a catalyst for the resolute implementation of the necessary reforms. This would enable the Member States of the EU to fully exploit the benefits of economic and financial integration, with positive effects on growth potential and job creation in the euro area. Having said all this, we should not forget how Europe would look today without the euro. An issue that was only marginally addressed during the conference. It goes without saying that the euro area countries would be significantly worse off. Multiple crises would arise simultaneously. Currency crises would go hand in hand with banking crises and real economy disruptions at country level. These currency crises might also spill over to other countries in the region. Not to forget political tensions between countries. By eliminating contagion via the exchange rate channel, the euro has mitigated the risk of contagion stemming from national economic or financial crises. In this sense, the euro has been a very important stabilising element in difficult times. BIS Review 139/2008  3  It is therefore not surprising that many central and eastern European countries would like to join the euro area on a fast-track procedure to be better shielded from global financial tensions and crises.
Finally, one principle – that has gained much attention during the current crisis – is to keep the determination of the monetary policy stance distinguished from the management of liquidity in money markets. All these principles are captured in the ECB’s monetary policy strategy. And globalisation does not fundamentally alter these principles – which give guidance, in particular, in critical times. To weaken or even abandon these principles would undermine our commitment and credibility. And, in the end, we would risk losing orientation. Our strategy has provided a consistent and coherent framework not only for internal analysis and policy decision-making but also for external communication. Using the same framework for internal and external purposes has helped the ECB to ensure that its monetary policy remains consistent, credible and effective. One key element here is that the ECB, from the outset, has been transparent about its mandate, strategy, and decisions, as well as about what monetary policy can do and, even more importantly, what it cannot do. In this sense, expectations about transparency requirements should be in line with the actual strategy followed by the central bank. Without compromising on its mandate, the ECB has demonstrated a willingness and capacity to react rapidly to exceptional circumstances. It has taken a large number of extraordinary measures to support the functioning of the money market and interbank intermediation.