and in loans to the private sector fell sharply between 2008 and mid - 2010 ( slide 5 ). since then, money and credit growth started to recover. however, underlying growth trends remained moderate, correcting a sizeable part of the excess liquidity that had been accumulated before the start of the crisis. monetary policy the ecb from the very beginning of the crisis has taken decisive and swift action through both its standard and non - standard monetary policy measures. in a first response to intensified financial market tensions, and based on our assessment of medium - term risks to price stability in the euro area, we reduced our key interest rates by 325 basis points between october 2008 and may 2009 and kept them unchanged until april 2011. during this time, the main refinancing rate of the eurosystem stood at 1 %. ( slide 6 ). over the same period, the overnight money market interest rate ( eonia ) also decreased rapidly, reaching levels as low as 0. 3 %. earlier this year, in april and july, we raised interest rates in two steps, each time by 25 basis points. at that time, we were concerned that prevailing upward price pressures, mainly from energy and commodity prices, could translate into second - round effects in wage and price - setting and to broad - based inflationary pressure. however, the picture has changed since then. the economic outlook has worsened amidst continued high uncertainty and intensified downside risks. in such an environment, it is reasonable to expect moderate price, cost and wage pressure. this assessment has led us to the decision last month to reduce rates by 25 basis points. our main refinancing rate therefore now stands at 1. 25 %, and the rates on the deposit facility and marginal lending facility at 0. 75 % and 1. 75 % respectively ( slide 7 ). at the same time, we have introduced a number of non - standard monetary policy measures, with the aim to support credit flows from banks and thereby ensure that our interest rate is transmitted properly to households and firms. notably, the design of these measures has taken into account the pivotal role of banks in financing the real economy of the euro area bis central bankers ’ speeches ( slide 8 ). they focused on a proper functioning of the banking sector, by ensuring that funding markets, notably the money market, continued functioning. the main non - standard monetary policy measure in that context is the full allotment of liquidity demand by banks, at fixed, low rates, against

addressed. this requires tackling vulnerabilities and increasing the resilience of non - bank financial institutions and market - based finance. in this regard, the esrb has 2 / 3 bis - central bankers'speeches repeatedly noted that a lack of tools is hampering authorities'ability to address financial stability risks beyond the banking sector. it has called for authorities to be provided with such tools, for example, in the context of the review of the prudential rules governing investment funds and insurers. the current heightened risk environment makes this more urgent. against this background, let me now turn to the four distinguished panelists that are together with me today : claudio borio, alfred kammer, lucrezia reichlin and ricardo reis, who are very well known to you in the audience and, therefore, need little presentation. let me, anyway, briefly introduce them to you, by alphabetical order : claudio borio is the head of the monetary and economic department of the bank for international settlements. he has held various positions of responsibility at the bis over the last 35 years and during this period he has authored numerous publications in the fields of monetary policy, banking, finance and issues related to financial stability. alfred kammer is the director of the european department at the international monetary fund. in that capacity, he leads and oversees the imf's work with europe on financial sector surveillance, monetary and macroprudential policies and financial regulation, among other key areas. lucrezia reichlin is professor of economics at the london business school with a background in central banking. she was previously director general of research at the european central bank. last but not least, ricardo reis is the a. w. phillips professor of economics at the london school of economics. widely regarded as one of the top research macroeconomists of his generation, ricardo has published extensively on monetary and fiscal policy, inflation and business cycles. thank you claudio, alfred, lucrezia and ricardo for kindly accepting the invitation to be with us today. as discussed with you, i would first give the floor to alfred. 3 / 3 bis - central bankers'speeches