development of macroprudential tools to increase resilience to shocks when they occur. third, we have also taken bold steps to strengthen europe. at the national level, euro area 4 / 5 bis central bankers'speeches countries have stepped up structural reform efforts in the labour and product markets to boost productivity and in the fiscal sector to make public finances more effective. the banking union ( with a single supervisor, a single resolution mechanism and – a yet - to - be - established but of utmost importance – shared european deposit insurance scheme ) has helped create a better integrated, more efficient and well capitalised european banking sector. coupled with the completion of the capital market union, it can support the single market and fund investment and growth. at the same time, many challenges remain and a lot still needs to be done. the financial system continuously innovates and the work of regulators comes with a lag. in fact, certain large financial institutions that conduct activities similar to banks but have no banking license – what we call non - banks – remain insufficiently monitored and under - regulated. challenges also remain outside the financial system, with for instance geopolitical risks remaining elevated, trade disputes or cyber - risks. as central banks, we have to be prepared for all contingencies. for someone like me, with deep interest in economic history, it is clear that “ those who can ’ t remember the past are condemned to repeat it ”. we need not only the ability to learn from the mistakes of the past, but also the vision to avert repeat mistakes. at the same time, it is our duty to strengthen our safety net and be better prepared for all contingencies and, as i just discussed in my remarks today, a lot has been done on that front 1 since the announcement of policy measures in june 2014, lending rates for non - financial corporations and households have dropped by around 130 basis points and 110 basis points, respectively. rates on very small loans ( a proxy for loans to smes ) have declined by more than 210 basis points. heterogeneity of lending rates across countries has fallen sharply. see mersh, y. ( 2018 ), “ monetary policy in the euro area – a brief assessment ”. mni connect roundtable, singapore, october 2018. ( www. ecb. europa. eu / press / key / date / 2018 / html / ecb. sp181010. en. html ) 2 bernanke, b. (

end - june 2018 data, the stock of npes reached €88. 6 billion ( 47. 6 % of total exposures ), i. e. it decreased by 17. 3 % or €18. 6 billion from its march 2016 peak. the key driver of npe reduction so far has been write - offs. going forward, npl sales and securitisation will play a more important role, coupled with collections, collateral liquidation and curing of loans. the pace of npe reduction is anticipated to accelerate based on the more ambitious revised banks ’ npe targets covering the period up to 2021. efficient npe management will also underpin the operating profitability and internal capital generation capacity of banks, contributing to the restoration of their credit intermediation function and the establishment of a sustainable business model. this, in turn, is of utmost importance for the financing of innovative and export - oriented investment projects and companies in the context of the rebalancing of the greek economy. conclusion the recent financial crisis has been the most severe in seventy - five years. a key question not only for all of us in this room but also for those who study it or act as policy makers is “ will it happen again? ” my answer is − if and when it does happen − next time will be different. first, a long absorbed lesson is that, while things may work well if left to the invisible hand, during periods of stress that hand seems to lose its grip, in the words of ahamed liaquat in his pulitzerwinning “ lords of finance ”. policy makers around the world have learned their lessons from the great depression : a financial system in distress requires active central bank intervention. central banks thus acted quickly and forcefully. they equipped their toolkit with a combination of more flexible, effective and innovative measures and enormous firepower. given the success of these policies, some of these instruments may be permanently included in the new standardframework, and thus equip policy makers with the tools to engage in proper and timely action. second, we as central bankers have gained a much better understanding of how the financial system operates and how risks to the stability of the financial system may develop. a lot has been done to make the system much safer than it was 10 years ago and as resilient as possible. such work has progressed in various directions, including not only better regulation but also higher capital and liquidity buffers for banks, early warning systems and the