- Measurement of the financing conditions should adopt a holistic and multi-faceted approach, covering a set of indicators proxying the various transmission channels for our monetary policy.6 Nevertheless, I wish to stress the key role interest rates play, given that, unlike many other indicators, they are available in real time, they are closely linked to other relevant prices in the financial markets and monetary policy transmission channels, and they can be controlled, at least partially, through central bank actions. In other words, they are uniquely positioned between our tools and the variables we wish to influence. What we observe today in relation to interest rates informs us of the foreseeable effect our monetary policy measures will have, such that they may guide the purchases we make today. - In this respect, long-term nominal interest rates have risen slightly in the euro area since December. The observed increases were initially accompanied by a recovery in inflation expectations, with real interest rates remaining practically unaffected. However, in a setting where inflation expectations are well below our aim, a decrease in real interest rates would  6  See P. Lane (2021). 8  have made a greater contribution to the recovery and helped achieve this aim. - More recently, the increases in long-term nominal interest rates have not been accompanied by increases of the same magnitude in long-term inflation expectations, resulting in a slight de facto increase in the real interest rate. This may have a negative impact on economic activity and thus inflation.

•  Such risks include defaults and insolvencies of trading partners, regulatory changes, expropriation, labour unrest, and acts of terrorism. •  As the largest centre for structured trade credit and political risk insurance in Asia, Singapore can provide Chinese banks and corporates comprehensive and tailored risk management solutions. Infrastructure financing China is playing an increasingly important role in helping regional economies with infrastructure development through its “One Belt One Road” initiative. Chinese corporates and financial institutions can tap into Singapore’s well-developed infrastructure financing ecosystem in the following ways. •  Leverage on the strong network of multilateral agencies, banks and institutional investors to access regional infrastructure deals. •  Deepen their expertise in project structuring, risk allocation, and loan documentation. •  Gain access to the network of local project sponsors who are traditionally more accustomed to dealing with local and global banks. 4  BIS central bankers’ speeches  Asset management China is one of the key markets for Singapore-based fund managers, both as an investment destination as well as a source of capital. •  There is strong interest from financial institutions here to tap Singapore’s RQFII quota and offer investments with China exposures. •  Last week, Blackrock secured RMB 20 billion of approved RQFII quota in Singapore, which is the second largest quota granted to-date. At the same time, the Singapore market offers globally diversified investment portfolios for Chinese pension funds, insurance companies, and individuals.