therefore, maintaining a steady hand continues to be critical to fostering a durable convergence of inflation towards our monetary policy objective. 1 see, for example, european commission ( 2017 ), european economic forecast – spring 2017. 2 for more details on the impact of the tltros, see european central bank ( 2017 ), “ the targeted longer - term refinancing operations : an overview of the take - up and their impact on bank intermediation ”, economic bulletin, issue 3, box 5. 3 see the ecb ’ s euro area bank lending survey, july 2017, and the ecb ’ s survey on the access to finance of enterprises in the euro area, october 2016 to march 2017. 4 see european central bank ( 2017 ), “ assessing labour market slack ”, economic bulletin, issue 3, box 3. 3 / 3 bis central bankers'speeches

spending. the investment outlook is also positive, supported not only by a need to modernise the capital stock after years of subdued investment and an improving outlook for profitability, but also by highly accommodative financing conditions as our policy measures have passed through financial markets to affect the borrowing conditions of businesses and their customers. since june 2014, bank lending rates for euro area non - financial corporations have fallen by almost 120 basis points, and for households by over 100 basis points. lending rates for very small loans, which can be taken as a proxy for loans to small and medium - sized enterprises ( smes ), have declined by almost 190 basis points. the significant improvement in funding conditions for smes is especially encouraging as they provide two - thirds of total private sector employment in the euro area. heterogeneity of lending rates across countries has also fallen sharply. for example, the difference between the average lending rate for firms in countries that were severely affected by the crisis versus other countries has narrowed by about 100 basis points over this three - year period. the pass - through of monetary policy has become more even and less distorting. 1 / 3 bis central bankers'speeches these positive developments have been further supported by the second series of targeted longer - term refinancing operations, which have led to banks passing on the favourable funding conditions to their customers. 2 for more details on the impact of the tltros, see european central bank ( 2017 ), “ the targeted longer - term refinancing operations : an overview of the take - up and their impact on bank intermediation ”, economic bulletin, issue 3, box 5. the sharp reduction in bank lending rates has been accompanied by easier access to funding, as recent surveys have shown. 3 see the ecb ’ s euro area bank lending survey, july 2017, and the ecb ’ s survey on the access to finance of enterprises in the euro area, october 2016 to march 2017. moreover, bank lending volumes have been gradually recovering since early 2014. according to the latest survey on the access to finance of enterprises, covering the period from october 2016 to march 2017, euro area smes have continued to signal improvements in the availability of bank loans. market - based funding conditions, too, have improved significantly in response to the corporate sector purchase programme launched in june 2016. against the backdrop of this substantial easing of financing conditions, domestic demand has become the mainstay of growth in the euro area, making