benefit from the impact of the ecb ’ s monetary policy measures and the low opportunity cost of holding the most liquid deposits. the narrow monetary aggregate m1 remained the main contributor to broad money growth. the recovery in the growth of loans to the private sector observed since the beginning of 2014 is proceeding. the annual growth rate of loans to non - financial corporations rose to 4. 1 % in june 2018, after 3. 7 % in the previous month, while the annual growth rate of loans to households remained unchanged at 2. 9 %. the euro area bank lending survey for the second quarter of 2018 indicates that loan growth continues to be supported by easing credit standards and increasing demand across all loan categories. the pass - through of the monetary policy measures put in place since june 2014 continues to significantly support borrowing conditions for firms and households, access to financing – in particular for small and medium - sized enterprises – and credit flows across the euro area. to sum up, a cross - check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed that an ample degree of monetary accommodation is still necessary for the continued sustained convergence of inflation to levels that are below, but close to, 2 % over the medium term. in order to reap the full benefits from 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 to increase resilience, reduce structural unemployment and boost euro area productivity and growth potential. regarding fiscal policies, the ongoing broad - based expansion calls for rebuilding fiscal buffers. this is particularly important in countries where government debt remains high. all countries would benefit from intensifying efforts towards achieving a more growth - friendly composition of public finances. a full, transparent and consistent implementation of the stability and growth pact and of the macroeconomic imbalance procedure over time and across countries remains essential to increase the resilience of the euro area economy. improving the functioning of economic and monetary union remains a priority. the governing council urges specific and decisive steps to complete the banking union and the capital markets union. we are now at your disposal for questions. 2 / 2 bis central bankers'speeches

of the adjustment in external imbalances since the crisis has been cyclical, not structural according to the imf, the us current account deficit is projected to reach about 3 % of gdp in 2011, against surpluses of roughly 5 % and 9 % of gdp for china and oil exporters respectively. they are a source of tensions that could ultimately lead to protectionist pressures. however, the euro area as a whole has a balanced current account position. global fiscal imbalances remain significant, with a marked degree of heterogeneity between advanced and emerging economies. consolidation efforts required to bring public finances to a sustainable path are a key priority for advanced countries. efforts made to adjust these imbalances remain clearly insufficient. this raises the risk, which i referred to earlier, of a disorderly unwinding down the line, with significant potential fallouts for global financial markets and the global economy. at their cannes summit on 3 – 4 november 2011, g20 leaders agreed on an action plan to lay the foundations for strong, sustainable and balanced global growth in the medium - term. this is welcomed. all g20 members made commitments, but they are sometimes imprecise. it is often unclear as to how these commitments can genuinely contribute to a rebalancing of global demand patterns. for instance, only a few of the g20 members explicitly reaffirmed their support to the solemn pledge by their leaders in toronto last year to halve fiscal deficits by 2013 and stabilise public debt ratios by 2016. large emerging markets have announced that they would enhance the flexibility of their exchange rate regime, but without indicating a specific time - frame when this would occur. europe is doing its share in committing to accelerate and further deepen the single market. more decisive policy measures to rebalance global demand patterns are still required, in particular to raise savings in deficit economies and increase domestic demand in surplus economies. all systemic economies could benefit from effective multilateral surveillance along with their international responsibilities. now is not the time to lose sight of the need to correct imbalances globally although our attention is – for good reasons – more focused on immediate challenges! * the second and related key global policy challenge relates to how best to address global liquidity conditions and volatile capital flow constellations. ample global liquidity conditions bis central bankers ’ speeches have the potential to push volatile capital flows into emerging economies. if they respond by accumulating reserves to cap exchange rate appreciation, this widens global imbalance