At the same time, overall financing conditions continue to improve, which should support the demand for loans  BIS Review 161/2009  1  in the period ahead. Thus, at present we see no signs of a credit crunch for the euro area as a whole. We are monitoring developments very closely. It is against this background that the Governing Council continues to view the current level of key ECB interest rates as appropriate. 2. Phasing-out of non-standard measures  In response to the financial crisis, the Eurosystem has introduced a number of non-standard measures since October 2008. As I explained to you before, the five key elements of our enhanced credit support have been: fixed rate full allotment; an expansion of the list of collateral; longer maturities for refinancing operations; liquidity provision in foreign currencies; and financial market support through a measured but significant covered bond purchase programme. These measures have served the economy well in critical times. They have supported the ability of banks to provide credit to the euro area economy, ensuring that money and credit market conditions properly reflect the monetary policy stance decided by the Governing Council. As you know, all our exceptional measures were designed with the phasing-out in mind. In most cases, the phasing-out occurs naturally, and our operational framework is sufficiently flexible for us to be able to adjust liquidity conditions when warranted. Our institutional independence means that we are unrestricted in our ability to implement the appropriate decisions.

This could weaken public confidence in the sustainability of public finances, with adverse effects on market sentiment, leading to less favourable medium and long-term interest rates. Unsustainable fiscal positions may also complicate the task of our monetary policy to maintain price stability. Communicating credible fiscal exit strategies is therefore crucial in order to anchor expectations. Such strategies need include credible measures, notably on the expenditure side. As agreed by the Ecofin Council last week, governments need to set out concrete and quantifiable adjustment measures that will lead to a sustainable correction of fiscal imbalances. Several countries will have to start consolidation in 2010, and all others in 2011 at the latest. 3. Systemic risk  Let me now turn to the last topic we selected, namely the issue of systemic risk in highly interconnected financial systems and ways to address it. Systemic risk is the risk of a broad-based break-down of the financial system. It results from an impairment of the financial system, generally resulting from the high degree of interplay and interconnectedness within the system. Systemic risk is distinct from the risk that can affect the safety and soundness of individual financial institutions. Furthermore, systemic risk, when it erupts, is to be certain to seriously affect the financial intermediation process to such a degree that there are negative spill-overs to the real economy. The crisis has illustrated that systemic risk may be triggered by the collective behaviour of institutions and the manner in which they interact in financial markets.