the u. s. and in the u. k. were instrumental in decreasing yields by several tens of basis points, with spillover effects on other asset prices, including mortgage rates and exchange rates. in turn, gdp growth and inflation rates also appear to have been significantly affected. after all, even if they have to use new instruments, central banks cannot avoid their responsibility in ensuring price stability, as long as inflation continues to be determined by monetary policy. broad - based asset - purchases would allow the ecb to continue pursuing its mandate even under more adverse circumstances. it is however important that other policies also play their part. an extreme adverse scenario that has recently appeared in the public debate is that of a “ secular stagnation ”. 8 this is effectively a situation where the “ natural ” long run growth rate of the economy falls significantly and permanently, e. g. because of a fall in the growth rate of population or because of a fall in technological progress, or both. this scenario is only still a possibility, but it is illustrative of a broader need for structural policies to again unleash the growth potential of our economies. public spending should be redirected towards public investment in infrastructures and education. international trade and labour mobility should be fostered. these are the best recipes to ensure that the secular stagnation will remain a purely academic hypothesis. conclusions today, i have focused on the low inflation challenges, but let me conclude with a quick reminder that we remain watchful of financial market developments. a necessary condition to ensure the effectiveness of our intended monetary policy stance is to alleviate credit supply constraints. this explains why new targeted ltros are part of the package of measures decided by the governing council in june. see e. g. krugman, p ( 2013 ) “ secular stagnation, coalmines, bubbles, and larry summers ” http : / / krugman. blogs. nytimes. com ; krugman, p. ( 2014 ) “ inflation targets reconsidered ”, presented at ecb forum on central banking, sintra ; summers, l. ( 2013 ) “ remarks at imf fourteenth annual research conference in honor of stanley fischer ’ ’ ; eggertsson, g. and mehrotra, n. ( 2014 ) “ a model of secular stagnation ”, mimeo. bis central bankers ’ speeches to sum up, the main challenge monetary policy faces in the euro area today is to ave

##lfil our monetary policy tasks. i also want to stress that, as a rule, the implementation of the regime for non - eu countries should continue to rely as much as possible on cooperation with, and deferral to, local authorities. let me also stress the crucial importance of finalising the adoption of key pieces of eu legislation – such as emir ii – well in advance of brexit, in order to be prepared for all possible contingencies, including a no - deal scenario. failing to do so could leave central banks and supervisors without the appropriate tools to handle the risks linked to systemic euro ccps operating outside the umbrella of eu regulation. naturally, we are available to provide any assistance in the context of these discussions. finally, we should not overlook the systemic cross - border implications of central clearing within the eu. we should therefore also strive to achieve enhanced supervisory convergence within the union. this would contribute to ensuring the integrity of the single market 3 / 4 bis central bankers'speeches and a level playing field, consistent with the objectives of the capital markets union. the european parliament can play a key role in furthering these objectives. conclusion let me conclude. our monetary policy measures have had tangible benefits for the euro area economy. further policy initiatives are however needed to reduce vulnerabilities, strengthen resilience in crisis situations and increase growth potential. only ambitious policies will deliver concrete benefits for the people of europe. this is also what our common history tells us. this year marks the 25th anniversary of the single market and of the maastricht treaty ’ s entry into force. those were bold decisions and we continue to benefit from them today : goods, people, services and capital can move freely and eu legislation ensures that commensurate rights and obligations apply throughout our union. with the creation of economic and monetary union ( emu ) we went further by adopting the single currency. it is in this spirit that i look forward to the coming months and the pivotal discussions we will have on reforming emu governance. thank you for your attention. i am at your disposal for questions. 1 www. ecb. europa. eu / press / key / date / 2018 / html / ecb. sp180205. en. html 2 see “ low inflation in the euro area : causes and consequences ”, ecb occasional paper series, no 181, january 2017. 3 see “ domestic and global drivers of inflation in the euro area ”, ecb economic bulletin