costs and borrow more. indeed, at the launch of the app nominal borrowing conditions for virtually all sovereign issuers were the most favourable in post - war history. but the low yields we saw in january were not a limiting factor on our programme ; they were proof that it was already working. following our communication on our reaction function in the first half of last year1, interest rates had in fact been falling consistently over the months preceding the launch of app, as markets began to price in our likely response to a prolonged period of too - low inflation. taking the gdp - weighted average of the euro area 10 - year government bond yields, yields fell by around 150 basis points between early june 2014 and early march 2015, interest rates had in fact been falling consistently over the months preceding the launch of app, as markets began to price in our likely response to a prolonged period of too - low inflation. taking the gdp - weighted average of the euro area 10 - year government bond yields, yields fell by around 150 basis points between early june 2014 and early march 2015. that also had spillover effects, through portfolio rebalancing, to the cost of market finance across the economy. yields of bank bonds fell, on average, by 75 basis points between early june 2014 and the start of the app. yields of investment - grade bonds issued by firms also fell by about 100 basis points over that same period. studies by ecb staff attribute a significant portion of those declines to the credit easing package and the announcement of the app. see speech by mario draghi, monetary policy communication in turbulent times, at the conference de nederlandsche bank 200 years : central banking in the next two decades, amsterdam, 24 april 2014. bis central bankers ’ speeches for asset purchases to boost activity and inflation, however, these improvements in financial markets need to be passed through into credit conditions for the real economy. here there was another concern about the effectiveness of our policy – that with banks deleveraging, trying to enlist them as vehicles of monetary policy might be futile, as banks would retain the stimulus and try to deleverage rather than create more loans. in fact, the power of transmission through the banking system has been rising through the life of our programme. between june 2014 and today, composite lending rates for non - financial companies have declined by more than 70 basis points for the euro area as a whole, and by between 110 and 120 basis points in stressed economies in the euro area periphery. that is a formidable

council adopted a procedure to enhance macroeconomic surveillance in the euro area, on the basis of indicators such as unit labour costs, current account imbalances, etc. the ecb contributed to this debate by proposing a traffic light system to warn about emerging competitiveness losses. the problem lies in devising a system of governance to assess competitive positions. it has to be restricted to the euro area, i. e. 17 countries at the moment. it cannot be at the eu - 27 level. why not? because problems of competitiveness within a single currency are very different from those of countries with their own currencies. i suppose i don ’ t need to give concrete examples to convince you of this. currently, the only 17 - country european body is the eurogroup, an informal grouping consisting of the finance ministers of the euro area. the bis central bankers ’ speeches eurogroup mainly deals with issues for which the finance ministers are responsible, notably budgetary policies and international financial issues. competitiveness depends on many other aspects, such as labour and product market regulations, which generally do not fall within the competence of finance ministers. the ministers who deal with these other matters are typically not faced with issues related to the euro area. and all council formations in the eu meet in full composition only, i. e. at the 27 - member level. the heads of state and government have met, in euro area composition, on numerous occasions during the crisis, starting in october 2008, when they decided to intervene jointly in support of the financial system. there was concern about and even opposition, in germany as well, to a more systematic role being given to the euro area composition of the european council and possibly other formations of the council. it was feared that this would interfere with, or be a counterweight to, the ecb, and would undermine its independence. the experience of the crisis, and of the first decade of the euro, is that the ecb has remained fully independent and has nothing to fear from a more cohesive euro area governance. on the other hand, the lack of a strong decision - making body at the political level may unduly constrain the effectiveness of and overburden the ecb ’ s actions. the crisis has also shown what the founding fathers of the euro knew all along, i. e. that monetary union means much more than adopting a single currency. it entails a high degree of political union, for it requires many more decisions to be taken