madam president the president of the european central bank jean-claude trichet recently said that when the market stabilises we will not return to business as usual but instead we will experience a new normality
given the failings and weaknesses in the market and institutions that have been brought to light in devastating fashion over the last year a move away from the abuses and faults of the past is only to be welcomed
the financial crisis has caused terrible panic but it has also served to emphasise the need to eliminate obscurities and to introduce transparency and for we legislators to regulate
but we also must avoid panic because if we panic we will make poor decisions
in the us out of the scramble to avert catastrophe radical alterations to the landscape of high finance are emerging
our institutions have stood steadier than those in the states understandably as the crisis originated across the atlantic yet certain cases are a reminder that we are in no way invulnerable
to ensure the stability of our markets in the future we must implement structural and systematic reforms and be prepared to act quickly
there may be three things that will happen or have happened already such as reforms for example ensuring that central banks prevent runs on banks and financial institutions and there has been significant action in this regard already
secondly treasuries must remove the reason for runs occurring in the first place namely the presence of distressed assets in the balance sheets of financial institutions
lastly it is pivotal for the financial system to be recapitalised
we have passed the initial stages of the crisis
the effects on banking and the political response to this initial trauma will not be known for some time
however we now have to face up to ensuring that the new financial reality that emerges from the other end of this crisis is a strong and healthy one
to this end it is necessary to address the root of the crisis and to remove distressed assets and clean up balance sheets
to emerge from the quagmire of the crisis it is also necessary for both localised and global economic health to show there is sufficient capital in the finance system
whether this is from public or private injection or a combination of both is another discussion but we must have one soon
we do not know yet what the full and lasting impact of the world's financial crisis and its consequences on european markets will be
however what we do know is that to emerge standing from this crisis and to be sure that investors markets and citizens are protected in the new normality that will result we must keep our heads even in time of doubt and turmoil and take concrete steps towards implementing structural and systematic reforms that will safeguard the health of our european system and the financial well-being of citizens of european countries and globally
