eu in the face of current uncertainties and in preparation for future challenges. the euro area ’ s resilience in 2016 despite a range of negative shocks shows that we are on the right track. it also suggests that reforms at national and european level are paying off in terms of economic growth. as the economic situation improves, and even though challenges in other policy realms have 3 / 4 bis central bankers'speeches understandably been the recent focus of our attention, we should not stop our efforts to make emu more resilient and prosperous. we can and should address the remaining, well - identified fragilities at national and european level. on the latter point, i look forward to the continued support of the european parliament in the second half of this legislative term. thank you for your attention. i am now at your disposal for questions. 1 see the full text of the treaty on european union 4 / 4 bis central bankers'speeches

over the last year. moreover, low longer - term interest rates increase the market value of financial assets held by banks. this, in turn, results in capital gains that further support bank profitability. this aggregate picture masks some heterogeneity within the banking sector. in particular, depending on their business models, individual banks might be affected in different ways by the low interest rate environment. a second issue is the potential risk of credit or asset bubbles. currently, we do not see compelling evidence at the euro area level of stretched asset valuations. both corporate bond spreads and equity prices appear to be broadly in line with fundamentals. similarly, real estate price growth remains moderate in the area as a whole, although significant cross - country heterogeneity is observable. this assessment is corroborated by the fact that credit growth is still modest, which suggests that asset price developments are not accompanied by increasing leverage. nevertheless, the longer the accommodative measures need to be kept in place, the greater the risks of unwarranted side effects on the financial system become. for instance, asset prices may increase to levels that are not in line with fundamentals because investors might be tempted to take on more risk during times of low yields. such developments are best addressed by enacting appropriate macro and micro prudential policies. while our single monetary policy is geared towards delivering price stability for the euro area as a whole, macroprudential policy measures can be designed to address financial stability risks that may be building up in specific market segments, jurisdictions or individual countries. addressing potential risks at their origin also reduces the probability of contagion throughout the euro area. microprudential policies also help to reduce vulnerabilities in banks. i therefore welcome the european commission ’ s risk reduction proposals presented last november, which further develop the eu ’ s legal framework for credit institutions and should increase the resilience of banks. conclusion let me conclude. as i argued last week in ljubljana, and as the crisis has shown, the benefits of the single currency can only be fully reaped if we have policies and institutions at national and european level that ensure it works for everyone. in the run - up to the launch of the euro, there was a strong commitment to advancing along the path of institutional and economic convergence. the crisis showed that this commitment cannot be relaxed. in fact, it remains fully relevant today as we seek to strengthen emu and the