our economy. therefore, at our last meeting in january we judged that it will be necessary to review and possibly reconsider our monetary policy stance at our next monetary policy meeting in early march, when the new staff macroeconomic projections become available. strengthening the euro area recovery our monetary policy is working ; and the ecb is willing to contribute its share to ensuring that the recovery remains firmly on track. but there are risks that – if they were to materialise – could undermine its course. the policy challenges we face are fourfold. they relate to : the global environment ; the situation of the financial system ; the economic and fiscal policies of member states ; and the political uncertainty surrounding the european project. first, as regards the global environment : growth prospects are slowly improving in advanced economies, but the outlook in emerging markets is more subdued. overall, growth is low by historical standards. moreover, emerging markets are facing economic and financial risks : some are suffering from structural impediments and macroeconomic imbalances ; others have to adjust to lower commodity prices. they remain vulnerable to an abrupt shift in risk sentiment that could tighten financing conditions. a key issue is how emerging markets will be impacted by tighter financing conditions ( and the ensuing capital outflows ) and to what extent this will have repercussions for euro area foreign demand. against this background, ensuring the continued resilience of the euro area economy is paramount. second, there are policy challenges related to our financial markets. the euro area financial system weathered several episodes of stress in the second half of last year. this is a sign that a lot has already been achieved with the establishment of banking union, which, however, is not complete yet. to make our financial system truly safe and sound we need to progress in two main domains, which complement each other. on the one hand, we need to finalise and implement the work we started when establishing the single supervisory mechanism and single resolution mechanism as the initial pillars of banking union. this includes further regulatory work to harmonise our rules for supervisory action and ensure a consistent application of the bank recovery and resolution directive ’ s bail - in provisions. on the other hand, we need a common public backstop for the single resolution fund to strengthen its credibility and we need to ensure that confidence in the safety of deposits is equally high in all bis central bankers ’ speeches euro area member states by establishing a european deposit insurance scheme. “ riskreduction ” and “ risk - sharing ” measures

crisis. he emphasises, “ but communication – no matter how clear – only works if the communicator is credible. the ecb has a track record of following up words with deeds, and we intend to maintain it. ” * * * ladies and gentlemen, the last ‘ ’ ecb and its watchers ’ ’ conference took place in june 2012. on that occasion i talked about heterogeneity across euro area countries, which was indeed a burning issue at that time, when fractures were running along national borders within the euro area and the integrity of the euro area itself was threatened. today, almost two years on, the situation has improved distinctly. markets are slowly but consistently re - integrating. production and i would like to thank arthur saint - guilhem and spyros andreopoulos for their contribution in the preparation of this speech. bis central bankers ’ speeches incomes are growing again and growth is spreading visibly to the most stressed parts of our union. and our union has expanded in the meantime, a sign that the euro project remains an anchor for the future of many europeans once on the outskirts of the continent. but the necessary institutional transition – which is re - shaping and reinforcing the architecture of monetary union – is still proceeding. the central bank has been accomplishing its objective in a weak institutional environment, which did not facilitate its task. the monetary union is composed of 18 independent states, with important internal imbalances and with different historical backgrounds which shape their diverse policy priorities. for some, a central bank managing the aftermath of the great contraction is doing too little. for other, we are too bold and experimental. our policy aim is clearly price stability for the euro area as a whole. several times over the past years we have been confronted with economic and financial developments that had the potential, if not addressed forcefully, to compromise price stability for the euro area as a whole. we had to act, to take decisions, and to communicate these decisions to the public in a clear and coherent manner. in doing so we were not alone, as several central banks have used communication more intensively as an instrument of crisis control. monetary policy communication is never easy : one has to find the right vocabulary to communicate to a wide audience notions and content that are not immediately intuitive but highly relevant for the lives of many people. monetary policy communication to a community of peoples as diverse as the euro area ’ s is even more challenging. this will be the subject of my thoughts today