But beyond that, it is not the ECB’s role to have additional involvement. What we have in the case of the European Union is additional responsibilities for crisis management, which are responsibilities of the governments in the euro area, not the responsibility of the ECB. Q. The Irish Central Bank has an emergency liquidity assistance programme. Do you think there could be a similar one for Greece or is there actually already one in place? I would not comment on emergency liquidity assistance. This is a national responsibility that each national central bank in the euro area may apply as is necessary in their own context. Q. Cypriot banks hold a sizeable quantity of Greek debt. How damaging or potentially damaging could that exposure be? Could the Central Bank have taken any steps to limit banks exposure to a single borrower? With respect to the exposure of Cypriot banks to Greek debt, we have examined the situation and we have come to the conclusion that even though there is exposure in our banking system, that exposure is manageable because our banks are very well capitalized. 4  BIS central bankers’ speeches  So even in the highly unlikely situation, if you wanted to run the counter factual, for example, of imposing losses on the holdings of Greek debt, our banks would manage to weather that. To understand how well capitalised our banking system is, a comparison may be useful. Our banks already meet the stricter capital requirements that are being phased in under Basel III.
As president Trichet explained in the press conference following the April policy meeting, there were arguments on both sides. We took the decision not to rewiden the interest rate corridor to its normal size at the April meeting. However, going forward, I would argue in favour of normalising the width of the corridor sooner rather than later. In my view, it is increasingly harder to justify the non-standard width of the corridor as time goes by. I don’t think there is any mechanical link between the decision as to when to phase out specific non-standard measures that have been introduced during the crisis. Q. On bond buying programme. What is your point of view with Greece, Ireland and Portugal being in the hands of the EU and IMF? Does it give rise to the need for the ECB to intervene? It is increasingly hard to justify the continuation of the SMP in light of the fact that it was introduced in order to alleviate some of the dysfunction in the monetary policy transmission mechanism in some markets, and I do not think that those conditions hold at the moment to the same extent. Q. Do you think it should be stopped completely or just be there in case the need arises again? The mere presence of the programme, even if no purchases at all are made for a very long time, can be a stabilising force in the markets in case additional tensions appear on the horizon.