In particular, the ECB expanded scope for central bank intermediation of transactions between banks, thereby offering an alternative to the malfunctioning private inter-bank money market. At the same time, the measures supported financial stability objectives by containing and mitigating the systemic consequences of liquidity tensions in the money market. To conclude, let me say a few words on the recent decisions of the Governing Council taken on 9 May and announced on 10 May. As I already said publicly, I will sum up in five points the Governing Council’s position. 1. The ECB is fiercely independent and takes all its decisions independently of governments, social partners and pressure groups of any nature. BIS Review 70/2010  3  2. We are inflexibly attached to price stability, our primary mandate. Our successful track record since the inception of the euro is remarkable. 3. Our present monetary policy stance is appropriate. Our decisions taken on 9 May have confirmed it. We are not engaging in any form of “quantitative easing”. 4. The “Securities Markets Programme” is designed to ensure an effective functioning of the monetary policy transmission mechanism by helping to resolve a malfunctioning of some segments of the euro area debt securities markets. 5. The liquidity provided through this programme is withdrawn in its entirety through tenders of term deposits.
Further development of this framework promises to support financial and macroeconomic stability, within an overall strategy focused on achievement of our primary objective: price stability. Such considerations, in concert with the development of a new framework for macroprudential oversight, should permit to reduce the frequency, duration and economic impact of financial crises. These are themes that will be discussed in depth in the course of today’s colloquium. We have to make sure that the global financial system, as well as continental and national ones, are made much more resilient. Yet, it would be unrealistic to believe that financial crises can be eliminated. Recent experience has also demonstrated the need for central banks to be timely and agile in managing financial crises without ever – in any circumstances – losing their sense of the medium to long-term orientation to price stability. As regards the ECB, in the face of financial crisis, monetary policy was eased significantly through conventional means in late 2008 and early 2009, with key interest rates being reduced significantly. Moreover, non-standard measures, in the form of the ECB’s enhanced credit support were introduced. These aimed at maintaining an efficient transmission of monetary policy by supporting market functioning. Such measures were instrumental in the maintenance of price stability, since, in the face of downside risks to price stability, they ensured that the easing of the monetary policy stance was transmitted into a broader easing of financing conditions.