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. (

. for the positive effects to materialise in the economy, an essential condition is that the agreed reforms are fully and consistently implemented without further delay. the cumulative gains from implementing only two thirds of the reforms in the services and labour markets over a 5 - year horizon would fall short, during the first three years, by approximately 4 % of gdp, compared to full implementation over the same 5 - year period. ( iii ) tackling the problem of non - performing loans ( npls ) the reforms are expected to further speed up the recovery and the restructuring of the economy. at the same time, however, the financing of the economy must be improved. this hinges crucially on the effective management of the high stock of non - performing loans ( npls ), which would impact positively on economic activity and productivity through two channels : by increasing bank credit supply and by restructuring the production model. this is why the relevant legislative framework must be complemented and completed as soon as possible. bank of greece analysis indicates that a reduction in npls would help reduce the financial risk of banks and their funding costs, while also boosting their capital adequacy ratios. this would result in higher loan supply as well as lower bank intermediation margins and borrowing costs for businesses and households. at the same time, the restructuring of overindebted but viable businesses could serve as a vehicle for attracting investment capital, thereby further stimulating investment demand. finally, the resolution of npls will free up resources, which if redistributed to the more productive businesses and sectors will lead to an increase in total productivity. 4 / 8 bis central bankers'speeches risks to the recovery of the economy in 2016 the greek economy found itself halfway between recession and growth. in 2017 it is expected to recover, although this outlook remains subject to risks. a first category of risks relates to a volatile global environment. uncertainties related to the global environment in which the greek economy is expected to operate are : ( a ) a series of crucial elections and a rise in euroscepticism across the eu. a strengthening of antieuropean forces would influence the decisions of leaders of several eu countries, thereby threatening to weaken eu institutions ; ( b ) uncertainties associated with changes in us foreign and economic policies under the new administration, which generate ambiguity about the future global role of the us ; ( c ) emerging protectionist trends, accompanied by a shortfall of private productive investment and a decline in world trade ; ( d ) possible