As recently pointed out by the G20 Finance Ministers and central bank governors, recent events have highlighted the importance of sustainable public finances : those countries with serious fiscal challenges need to accelerate the pace of fiscal consolidation;  2)  Secondly, the announcement of a EUR 110 billion financial aid package for Greece, agreed between the European Commission and the IMF conditioned to a package of substantial fiscal consolidation measures by Greece contributed to alleviate concerns in the markets. 3)  Thirdly, to restore confidence in the whole euro area and to contain contagion, a plan with a broader scope has been adopted at the euro area level, the European Financial Stabilization Facility, for a global amount of 750 billion euro with the financial participation of the IMF. One of the key features of this Facility will be the possibility to be used on short notice without involving further national Parliaments. Finally, let me focus on the other recent actions of the European central bank which have been essential in response to these challenging circumstances. Central banks complemented these actions by specific and innovated measures 1)  After careful consideration of all implications of this option and based on its positive assessment of the Greek consolidation package , the Eurosystem decided to suspend the reference to credit rating and current market prices in the collateral requirements for marketable debt instruments issued or guaranteed by the Greek government.
They may not be efficient since security prices are not formed in national contexts but on global markets. What would not be possible in Paris or Frankfurt could still be allowed in London or New York for instance. They may also be counterproductive since they could deter activities away from our market onto others and they could significantly alter the liquidity of securities aimed by the restriction since foreign investors may shy away from them and turn to other opportunities. Let me be clear, though, this does not mean that nothing should be done. On the contrary, I believe that instead of banning and creating incentives to relocate certain activities elsewhere or circumvent those rules, it is preferable to attract and better supervise. This can be done: -  First by integrating OTC markets into regulated and supervised market infrastructures such as trading platforms, trade repositories and CCPs. In the case of sovereign CDS this will mean that all CDS written on euro area sovereigns should be compensated in a CCP located in the euro area. Incidentally, that requires a fair amount of standardization of these single name CDS. -  Second, by enhancing transparency, both ex ante and ex post to improve our understanding of the price discovery mechanism and our knowledge of actual net positions of financial institutions. 4  BIS Review 84/2010  -  Finally, by improving risk management by agents active in these markets and ensuring that these practices are compatible with their risk profile.