to conclude. on 12 september the governing council decided on one of the most broad - based packages of monetary stimulus measures to date. of the five measures in the overall package, the two that i have discussed today may be particularly relevant for banks. these are the modification of the terms of tltro iii and the introduction of a two - tier system for reserve remuneration given banks ’ important role in monetary policy transmission. both measures will serve to mitigate the risk that the possible side effects of the ecb ’ s accommodative monetary policy stance on bank - based intermediation could undermine the sustained convergence of inflation to our aim. we are aiming to preserve favourable bank lending conditions in the euro area to further support the accommodative stance of monetary policy and ensure it is smoothly transmitted to the real economy. 3 / 3 bis central bankers'speeches

luis de guindos : measures to support monetary policy transmission through banks welcome address by mr luis de guindos, vice - president of the european central bank, to the money market contact group, frankfurt am main, 24 september 2019. * * * in its most recent policy meeting, the ecb ’ s governing council decided on a comprehensive easing package because the downward revisions in the projected inflation path warranted a vigorous policy response. the easing package comprised five measures : lowering the deposit facility rate, strengthening the forward guidance on the likely path of policy rates, restarting the net asset purchases within the asset purchase programme, changing the terms of the third series of targeted longer - term refinancing operations ( tltro iii ) and introducing a two - tier system for reserve remuneration. we believe that the measures announced last week complement each other and together constitute an effective response to the environment that the ecb currently faces. these decisions were taken against the following background. first, as a result of continued global uncertainties and their impact on confidence, our latest ecb staff macroeconomic projections were revised down. we face a more protracted economic slowdown than previously anticipated and see persistent downside risks to the growth outlook. second, inflation continues to fall short of expectations. headline inflation remains well below our medium - term aim, while core inflation has been hovering around 1 % for an extended period of time. market - based indicators of future inflation outcomes have stagnated at historical lows and the profile for headline inflation has been revised down, leading to a further delay in the convergence of inflation towards our aim. the case for a monetary policy response was clear and a comprehensive package of measures was judged to be the most effective response. i will take this opportunity to delve a little deeper into two of the measures that may be especially relevant for the banking sector. the first is the changes to some of the parameters of the third series of targeted longer - term refinancing operations – tltro iii – and the second is the implementation of a two - tier system for the remuneration of excess reserves. changes to the tltro iii programme you may recall that tltro iii was announced in march to preserve the very favourable bank lending conditions in the euro area and to ensure the smooth transmission of our highly accommodative monetary policy stance. at the same time, indexing the tltro iii rates to the main refinancing operations rate and the