Against this background, each bank's capital needs were identified on the basis of a rigorous stress test and, in accordance with the European authorities, restructuring or orderly resolution plans were drawn up and approved for those banks requiring them. In 2012, backed by public financial assistance, the institutions classified under “group 1” of the Memorandum of Understanding were recapitalised, and their problem construction and real estate development-related assets were transferred to SAREB (the asset management company for assets arising from bank restructuring). Into 2013, the “group 2” institutions subject to the exercise have been recapitalised, their troubled assets have been transferred to SAREB and the hybrid instrument management (burden-sharing) exercises have been conducted at all banks requiring them, except at one, where they began recently and will be concluded in the coming days. The public financial assistance to financial institutions in various forms of capital, since May 2009, has risen to € billion, € billion of which were under the Financial Assistance Programme agreed with the European authorities. Verification by the international authorities of the fulfilment of the conditions agreed in the July 2012 Memorandum of Understanding, the last round of which concluded only a few days ago, confirms that the Memorandum and its deadlines have been strictly adhered to and that the main objective, the restructuring and recapitalisation of our banking system, has progressed satisfactorily. As earlier stated, the Council of the European Union will shortly approve the Regulation governing the SSM, which will commence operating after a transitory period of one year.

So we must continue to nurture our ability to act together – which has again proven effective over the past year: we have managed to reduce our dependence on Russian pipeline gas by roughly 80%, and gas prices have now fallen back to levels below those seen before the invasion. In my remarks today, I will start by discussing current market developments and then proceed to outline our assessment of the euro area economy, before explaining our latest monetary policy decisions. I welcome the swift action and the decisions taken by the Swiss authorities. These actions were instrumental for restoring orderly market conditions and ensuring financial stability. We are monitoring market developments closely and stand ready to respond as necessary to preserve price stability and financial stability in the euro area. The euro area banking sector is resilient, with strong capital and liquidity positions. In any case, the ECB's policy toolkit is fully equipped to provide liquidity support to the euro area financial system if needed and to preserve the smooth transmission of monetary policy. Outlook for the euro area economy and the ECB's monetary policy  1/3  BIS - Central bankers' speeches  Let me now turn to the outlook for the euro area economy and monetary policy. Euro area activity stagnated in the fourth quarter of 2022, according to Eurostat's latest release. The outcome was slightly better than we had expected in December. However, private domestic demand fell sharply.