captain were to preserve his ship, he would keep it in port forever. ” under the capable leadership of our past governors, we have travelled far and have reached new points of opportunity. as captain now of our navigating team, i am confident in the course we have charted under “ continuity plus plus. ” i put my trust in the bsp crew, which has proven itself time and time again to be capable and skilled. we may be going through some strong headwinds today. but we stand undaunted. for bsp, it ’ s a matter of careful navigation and timely action. the economic ship itself is fundamentally solid and sturdy. we ’ ll get to better weather soon enough and sail on to destination. as i close, i recall my mission as head of team bsp. it is not only to deliver on our mandates today. rather, it is to build capabilities to address challenges and develop skills needed to conduct our mission given likely scenarios …. ready to respond where it matters … when it matters. this is the rationale for the bold organizational changes we have embraced thus far. these changes are meant to make the institution and its key officers more agile and resilient, 3 / 4 bis central bankers'speeches ready too – as individuals and as an organization – to navigate the future. let me recognize the crew : dg diwa guinigundo and the monetary and economics sector ( mes ) dg chuchi fonacier and the financial supervision sector ( fss ) dg cyd amador and the corporate services sector ( css ) ag dahlia luna and the currency management sector ( cms ) not to forget the offices directly working with me and of course the monetary board : carlos g. dominguez iii felipe m. medalla juan de zuniga, jr. peter b. favila antonio s. abacan, jr. v. bruce j. tolentino today, as always, we ready ourselves for more challenges ahead, taking stock of two - and - a - half decades ’ worth of lessons and experiences. maraming salamat team bsp. happy 25th anniversary to us all! mabuhay ang bsp! mabuhay ang bansang pilipinas! 4 / 4 bis central bankers'speeches

has been decided. furthermore, the ecb intends to enhance the use of bank loans as collateral in eurosystem operations. these measures should support bank lending, by increasing the amount of assets on euro area banks ’ balance sheets that can be used to obtain central bank refinancing. third, the governing council decided on measures aimed at fostering money market activity. amongst others, the reserve ratio will be temporarily reduced, from 2 % now to 1 %. this increases the incentives for market participants to engage in money market transactions. also, it increases the collateral available to banks, as it reduces their liquidity needs vis - a - vis the eurosystem and thereby the amount of collateral that needs to be posted. overall, all measures mentioned aim to ensure enhanced access of the banking sector to liquidity and facilitate the functioning of the euro area money market, thereby avoiding severe limitations to the real economy from a lack of financing possibilities. this also helps ensure that the official interest rates set by the ecb are transmitted in an appropriate way to the economy, and in that way help maintaining price stability in the medium term. ii. foundations for a stable economic and monetary union let me now turn to the outcome of the last european council. this council has really brought about a breakthrough in terms of commitment to sound and transparent fiscal rules. the foundations for a fiscal compact have been laid – a suggestion presented before the plenary of the european parliament at the ecb hearing on our annual report at the beginning of this month. it has been agreed that the annual structural deficit should not exceed 0. 5 % of nominal gdp. euro area member states will implement such a rule in their national legal frameworks at a constitutional level. the objective is to avoid excessive deficits before they arise, rather than bis central bankers ’ speeches trying to control them after they have emerged. an automatic correction mechanism is also foreseen in case of deviation. moreover, the leaders agreed on a numerical benchmark for annual debt reduction to bring down debt levels. sanctions will also apply automatically to euro area member states in breach of the 3 % reference value for deficits. the european court of justice may be asked to verify the implementation of these rules at national level. the new fiscal compact is an essential signal, showing a clear trajectory for the future evolution of the euro area. it frames expectations of both citizens and financial markets. enshrining strict rules in primary legislation, making them enforceable by the european court of justice :