A characteristic of the current situation in the euro area is the trend towards disinflation. The ECB expects to end this year, 2015, with a positive – but very close to zero – inflation rate. The risk of deanchoring medium-term inflation expectations does not seem imminent, but even so, the tendency in recent months is once again somewhat worrying. The phenomenon of inflation-free growth we are experiencing is one of the most noteworthy features of global economic developments in recent years, and a subject of debate and analysis by international economic organisations, academics and experts. The course of energy prices and globalisation are undoubtedly explanatory factors, but the phenomenon is admittedly one that poses many questions and, consequently, difficulties for economic policy. ECB measures For several years ECB monetary policy has striven to resolutely support economic recovery through standard and non-standard measures. After exhausting the standard measures, in September 2014 the ECB announced its quantitative easing programme with two new components: the asset-backed securities (ABS) purchase programme and the covered bonds purchase programme. Subsequently, in January this year an agreement was reached to extend the programme to include public securities. As at 30 September 2015, the assets acquired by the Eurosystem under the expanded purchase programme amounted to slightly more than € billion, a substantial amount of which (almost 72%) comprised government bonds. The programme has helped enhance monetary policy transmission, by reducing the fragmentation of European financial markets, and provided for lower borrowing costs for households and firms.

Fourth, alongside the Single Supervisory Mechanism, the Single Resolution Mechanism, the Resolution Board and the Single Resolution Fund are also being created and will likewise be pivotal to the construction of the Banking Union. 5. Fifth, this progress has notably coincided with very low interest rates, increasingly stringent regulatory requirements and strong competition, bringing pressure to bear on profitability. This may lead to attempts to achieve greater profitability at a higher risk, something that the supervisory authorities must monitor closely. 6. Sixth, from the standpoint of banking system users and customers, in the last two years a decline in and the practical removal of financial market fragmentation has been achieved. For Spain, the latest data indicate that the deleveraging of households and non-financial corporations is continuing, albeit less intensely. At the same time, there is an increase in the number of firms witnessing how their credit volume is growing (currently more than 40% of non-financial corporations are increasing their borrowing). These firms generally have a better balance sheet position and a brighter economic outlook. The debt-to-GDP ratios of non-financial corporations and households alike have continued to ease and are clearly below the peaks of the previous cycle in 2010, thus bringing Spain’s ratio closer to the average euro area ratio. Although private-sector deleveraging in Spain may yet last for some time, it is reasonable to conclude that most of the adjustment has now been made.