sufficient to affirm a 4 / 5 bis central bankers'speeches sustained adjustment, if even less supportive monetary policy conditions were to imperil the inflation trajectory. monetary policy will evolve in a data - dependent and time - consistent manner. once the governing council judges that the three criteria for sustained adjustment have been met, net asset purchases will expire, in line with our guidance. from that point in time, the evolution of inflation will remain conditional on reinvestments continuing for an extended period of time and on policy rates remaining at their present levels well past the end of our net asset purchases. the stock of long - duration assets held in our portfolio will continue to put downward pressure on longer - term interest rates well beyond the end of our net purchases. policy rates remaining at their present levels well past the end of our net purchases will contribute to holding the short to intermediate portions of the yield curve in check for as long as necessary, thereby ensuring that financial conditions remain consistent with a sustained adjustment of inflation. 5 / 5 bis central bankers'speeches

supervision, or even self - regulation, has not proven to be a convincing solution. over the last two decades, global financial markets have been characterised by a high level of volatility, a series of rapid booms, major upheavals and severe slumps. the asian financial crisis of 1997, the dotcom bubble of 1997 – 2000, the us subprime crisis as from 2007 and the european debt crisis are merely the most prominent examples. looking at all these events, there is a recurrent pattern : innovation in the real or financial economy and deregulation measures are followed by accelerated growth, which is accompanied by a very expansive lending policy on the part of banks. sooner or later, the boom comes to an end and price corrections take place that often end in a recession. as a rule, the stronger the boom is at the start of the cycle, the larger is the subsequent harm to the economy and to society. bis central bankers ’ speeches this pattern is often complemented by another factor. particularly, but not exclusively, in the financial sector – a sector with fierce competition between regulated and non - regulated financial market participants – regulatory loopholes are actively exploited in order to gain competitive or other advantages. this is particularly well illustrated by the example of assetbacked securities ( abss ). from the middle of the 1990s, the originate - to - distribute model, i. e. the securitisation and resale of loans, was seen by many as the financing model of the future, not just in the united states, but also in europe and germany. many saw it as a solution to economic and socio - political problems and took measures in favour of abs financing in terms of regulatory requirements. accordingly, banks were able, for example, to finance their abs - based special - purpose vehicles solely through short - term credit lines, credit lines that are in place “ until further notice ”. the “ loans ” to the special - purpose vehicle did not have to be backed by equity as long as the maturity of the loan commitments remained under one year. so it soon became standard practice among banks to limit the maturity of such credit lines to 364 days and to prolong them accordingly at maturity. the consequences of this practice became clear at the start of the subprime crisis in 2007 when german banks were among the first to run into difficulties because of these credit lines. • the past thus shows that financial markets do not always behave rationally. in fact, markets