is the ecb policy, but also the global situation in the world, that are of primary importance. for example, low or negative interest rates on our assets ( bonds, deposits ) have 4 of 7 led to a fall of our revenues. when the ecb changed its overnight deposit interest rates of banks ( march 2016 ) we introduced a negative interest rate on excess reserves in bank accounts in the cbbh. in the future, we will continue along similar lines. we have noticed that some major central banks started to raise the rates, especially the fed. the ecb keeps its „ gunpowder dry “ on interest rates, at least for the time being. their forward guidance indicates that there might not be increase in their rates until mid - next year. in october, the ecb decided that “ net purchases under the asset purchase programme ( app ) at the new monthly pace of €15 billion ( will continue ) until the end of december 2018 “. this may affect commercial banks interest rates in the euro area thus influencing indirectly ours. so, it seems reasonable to expect that interest rates will start increasing in the euro area, but we believe very gradually. true, it is difficult to predict, especially the future. second, to answer the question when normalization will be achieved, we would need to define what „ normalization " is. is it simply the average value of the past rates? if yes for how many years? five years before the gfc? difficult to say. but i think most of us in this room would agree that levels of interest rates, we see now, are „ not normal “ but „ exceptional “. but will „ the new normal “ be around 5 % nominal rates or closer to 2 %, is not clear at this point. if the rates go up, we will look for the „ silver lining ”, i. e. we expect this will have a positive impact on our revenues. as far as commercial banks interest rates are concerned, in our view, the ecb policies and external world do influence local rates, but the main causes of relatively higher lending rates in bh are primarily within bosnia and herzegovina like : the sovereign risk, inadequate foreclosure procedures or more generally lack of enforcement of contracts – rule of law, etc. thus, we in bosnia and herzegovina should worry less when the ecb will start raising rates and focus more on our own domestic problems, instead. and we have no influence on the ecb anyhow. as the saying

extending loans, mainly to blue - chip companies, while carefully evaluating the credit risks involved. there seem to be no significant changes in the fund - raising conditions of firms in the markets for such instruments as corporate bonds and cp. on the other hand, credit demand of private firms continues to lack momentum as corporate demand for external funds is subdued, since firms ’ cash flow is at a high level. moreover, firms continue to reduce their debts as part of their balance - sheet restructuring measures. as a result, credit demand in the private sector has continued to be basically stagnant. in view of this, the underlying tone of private banks ’ lending remains sluggish, although the year - onyear rate of decrease moderated somewhat in january and february. meanwhile, the amount outstanding of corporate bonds issued continues to be slightly above the previous year ’ s level. the amount outstanding of cp issued remains at a high level. recently, the growth rate of money stock ( m2 + cds ) is increasing reflecting the inflow from postal savings. as for funding costs for firms, both short - and long - term funding rates are declining reflecting the decrease in market interest rates. in this financial environment, the lending attitude of financial institutions and corporate financing conditions remain easy. however, the effects of the decline in stock prices on the behavior of financial institutions and the fund - raising conditions of firms need to be carefully monitored. “ the bank of japan will encourage the uncollateralized overnight call rate to move on average around 0. 15 percent. ”