is inevitable that unconventional policy settings, ranging from negative interest rates to purchases of a broad range of assets, can have unintended consequences on allocation and distribution. in the selection of our policy tools, we aim to minimise the extent of such distortions, which is why, for instance, we have so far focused our asset purchases as much as possible in the most liquid and generic asset classes. but there is no doubt that if we had to intensify the use of our instruments to ensure that we achieve our price stability mandate, we would. there cannot be any limit to how far we are willing to deploy our instruments, within our mandate, and to achieve our mandate. and indeed the european court of justice has stated that the ecb must be allowed “ broad discretion ” when it “ prepares and implements an open market operations programme ”. i can say therefore with confidence – and without any complacency – that we will secure the return of inflation to 2 % without undue delay, because we are currently deploying tools that we believe will achieve this, and because we can, in any case, deploy our tools further if that proves necessary. bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches

as a whole, and by between 110 - 140 basis points in stressed economies. that is a formidable pass - through. ecb staff estimates suggest that we would have needed to reduce the standard policy rates by around 100 basis points in june 2014 to achieve a similar effect on bank lending rates. improving financing conditions have also fed into improving macroeconomic conditions. according to eurosystem staff assessments, our measures will add almost 1 % to gdp between 2015 and 2017. and we are seeing an effect even on smaller firms that are typically harder for monetary policy to reach. in our most recent survey on smaller firms in the euro area, for instance, we saw for the first time since 2009 that the net percentage of small firms registering an improvement in business activity has turned positive, for all size sub - groups. crucially, our measures are also gradually feeding through into inflation. inflation would likely have been negative this year were it not for our measures. and according to the staff assessment, in the absence of our measures, it would be at least half of a percentage point lower next year and between 1 / 4 and 1 / 3 of a percentage point lower in 2017. so in assessing how to respond to the risks to price stability, the question we faced was not whether our tools worked – indeed, they are probably the dominant force spurring the recovery we see today. it was whether, in light of the evolution of those risks, the calibration of our policy was still sufficient. this is the question that the governing council addressed yesterday. on the real side of the economy, our assessment was that the recovery is ongoing and the economy remains resilient to volatility in the global economy. domestic demand is replacing foreign demand as the engine of growth, and our outlook for the coming years is broadly unchanged. on the nominal side, however, we perceived that the downside risks to the inflation outlook had increased, especially given continued declines in oil prices and a large output gap. without further monetary policy action, the date when inflation returns to our objective would once more have been pushed back. the governing council therefore decided that, to secure the path of inflation back towards 2 %, the calibration of our existing monetary policy measures needed to be adjusted. specifically, we decided to lower the interest rate on the deposit facility by 10 basis points to – 0. 30 % and to extend the app. the monthly purchases of €60 billion under the app are now intended to run until the end of march