conditions and support the economic expansion, and thus to ensure that inflation remains on a sustained path towards levels that are below, but close to, 2 % over the medium term. significant monetary policy stimulus is being provided by the forward guidance on the key ecb interest rates, reinforced by the reinvestments of the sizeable stock of acquired assets and the new series of tltros. in the euro area, in order to reap the full benefits of our monetary policy measures, other policy areas must contribute more decisively to raising the longer - term growth potential and reducing vulnerabilities. the implementation of structural reforms in euro area countries needs to be substantially stepped up. the mildly expansionary euro area fiscal stance and the operation of automatic stabilisers are providing support to economic activity. at the same time, countries where government debt is high need to continue rebuilding fiscal buffers. all countries should reinforce their efforts to achieve a more growth - friendly composition of public finances. the transparent and consistent implementation of the eu ’ s fiscal and economic governance framework, over time and across countries, remains essential. continued domestic economic growth last year, together with micro - and macroprudential actions, also helped support the resilience of the euro area financial sector. the aggregate common equity tier 1 ratio of significant institutions reached 14. 2 % at the end of the third quarter of 2018. outstanding non - performing loans ( npls ) declined by €94 billion in the first three quarters of 2018, and euro area significant institutions ’ aggregate npl ratio stood at 4. 2 %, down from 5. 2 % a year earlier. however, banks ’ profitability in the euro area, as in some other jurisdictions, remains low. risk - taking in parts of the financial and real estate markets contributed to mild signs of overstretched valuations in some areas, with marked cross - country differences, while risks continued to grow in the non - bank financial sector. in view of the current conditions, it is particularly important to continue improving the resilience of the financial sector and to ensure that it has sufficient buffers in place that can be released in times of stress. the euro area is now more robust than before the crisis. the economic and monetary union ( emu ) needs to be strengthened, first and foremost by implementing what has already been agreed and finishing the common projects we have started : completing the banking union, strengthening the operational capacity of the european stability mechanism in full compliance with union

minimum common denominator. certainly, this would not be sufficient to win back the confidence of public and private players in securitization. i therefore invite the industry to continue and to strengthen its efforts in this vital area of work. vi. concluding remarks let me conclude by saying that, if managed in good order, securitisation should be a welfareimproving tool, because value is created by secured funding that is correctly structured and allows to adequately distribute financing and funding, and the related risks among households, enterprises, banks and investors. when it works properly, securitisation may represent a significant step towards more complete credit markets, thereby contributing to enhancing the efficiency of the economic system. the revival of securitisation markets is needed in many countries to support the provision of credit to the real economy, particularly to households and small business. while it is essential to define new market standards in terms of simplicity and transparency, more actions may be needed to re - start the securitisation market. there does not seem to be one single and simple solution that can unlock the securitisation market. this is natural since structured finance is a combination of manifold features such as different asset types, a variety of interest rate products with diverse maturity profiles and structures, and a variety of legal regimes and market arrangements. thus, restoring the securitisation markets requires a combination of initiatives, both from the private and the public sector. the eurosystem is contributing, first of all, by accepting structured finance assets as collateral. this proved and still proves a great support to this market segment during the crisis, as it helped and continues to help to avoid a sudden and disruptive unavailability of funding to originators of abs. second, as mentioned earlier, by introducing a loan level data requirement to our set of eligibility criteria, we may contribute to increasing the disclosure standards for the market at large. however, more needs to be done, as many of those required steps, for example enhancing secondary market liquidity, go beyond the scope for direct action by the eurosystem. looking ahead, a self - sustained revival of the abs market requires fundamental changes. it is high time to raise to the challenges of transparency, standardisation and product simplicity. this is where the industry has to step up its efforts in order to help decisively in restoring confidence in the securitisation markets. thank you for your attention.