##nated securities at the beginning of the year. nonetheless, it seems rather likely that an upward trend in corporate bond issuance has commenced in the euro area. public authorities and efficient and stable capital markets in europe i touched upon the fact earlier that public authorities also see merit in having efficient and stable capital markets in the euro area and in europe generally. in order to contribute to a favourable development, authorities have been and are active in a number of fields. i will first mention something about the activities of other authorities and then i will conclude my presentation today with some remarks on how we in the eurosystem are contributing to a favourable development in this field. when i say eurosystem, i am referring to the european central bank and the eleven national central banks of the countries which have adopted the euro. a prudent, harmonised regulatory framework, on the one hand, and harmonised market practices, on the other, are key factors in guaranteeing the smooth integration and development of european capital markets. in these areas a lot of work has already been conducted, and a lot more has still to be achieved in order to pave the way for truly integrated financial markets. harmonisation in repurchase agreements, national company laws including bankruptcy laws, and other aspects of the legal and regulatory framework, for example, would enhance legal clarity and certainty and thereby improve the efficiency and stability of the financial markets. at this point, i would like to draw your attention to the action plan recently published by the european commission. it contains priorities and timetables for measures aimed at improving the functioning of the single market for financial services. in particular, measures are proposed to advance the harmonisation of the legal framework and market information, as well as to facilitate investors ’ operations throughout the single market. finally, what is the role of the eurosystem in this whole process? i could first mention the “ market - friendly ” operational framework of the eurosystem, which facilitates the efficient functioning of capital markets, for example, by being very transparent and accepting a wide list of securities as collateral. moreover, capital markets trade in long - term commitments, be they equities or bonds. when pricing these long - term commitments, investors face many uncertainties, not only concerning the issuer but also the future economic environment. the latter uncertainties are reduced by the eurosystem ’ s clear commitment to its primary objective, price stability. looking at the current situation in euro area capital markets, we can see that

speech mind the gap ( s ) : monetary policy and the way out of the pandemic speech by fabio panetta, member of the executive board of the ecb, at an online event organised by bocconi university milan, 2 march 2021 it is a great pleasure to be back at bocconi and share with you my views on the current economic situation. the year ahead will present macroeconomic policymakers with critical choices. in 2020, with the pandemic raging, the direction of policy support was obvious and the choices facing policymakers were relatively narrow. monetary and fiscal authorities everywhere intervened to support the economy on a massive scale. but in 2021, with the progress made on vaccine technology, policy choices have become less clear - cut. we face a situation in which the end of the pandemic emergency is in sight and an incipient recovery is on the horizon. as such, it might be tempting to conclude that there is less need for monetary policy support. but i will argue today that this temptation must be resisted. in fact, 2021 is still a “ pandemic year ”. and even if the pandemic ends soon, its economic consequences will not. 1 / 19 we will still face two prominent gaps that we need to close : the output gap and the inflation gap. and if we fail to do so with sufficient force – by being too hesitant in providing the necessary degree of policy support or withdrawing it too quickly – we could inadvertently hold back economic growth and depress inflation for years to come. so, we will in fact need ample policy support for as long as necessary to emerge stronger from the crisis and limit long - term damage. at present, the risks of providing too little policy support still far outweigh the risks of providing too much. by keeping nominal yields low for longer, we can provide a strong anchor to preserve accommodative financing conditions. improvements in the outlook will then work in our favour through lower real rates, further supporting confidence in a sustained return of inflation to our aim. eliminating downside risks there is undoubtedly some good news today. across advanced economies, vaccination programmes are ongoing ; the second phase of lockdowns has been less costly than the first ; the manufacturing sector continues to show resilience, buoyed by global demand. and the us administration is providing renewed support to multilateralism. in the eu, national and european authorities are working towards a swift implementation of the next generation eu ( ng