##ment by farmers. the last decade has seen significant financial innovation in terms of financing farmers through joint liability groups ( jlgs ), “ aggregation models ” and developing primary agricultural credit societies ( pacs ) into multi - service centres especially to meet the credit and non - credit services required by small and marginal farmers. iv. evolving patterns in the flow of agricultural credit having looked back on the policies that shaped agricultural credit, i will now highlight some of the broad outcomes of those policies. ( i ) growing role of the formal institutional structure in rural credit over the years, there has been a striking increase in the share of formal financial institutions ( commercial banks, rrbs and cooperatives ) in the total credit availed by cultivator households. in the 1950s, non - institutional sources, particularly money lenders, accounted for virtually all the credit taken by cultivator households with only negligible credit flow from the formal institutional structure. this situation had changed dramatically by the early 1980s, with formal financial institutions accounting for as much as 60 per cent of the total credit [ table 1 ]. 2 the gradual increase in the share of formal institutional credit in agriculture witnessed some reversal in the period between 1991 and 2002 mainly because of a pull back by commercial banks. this disquieting trend is, in part, due to a contraction in rural branch network in the 1990s, and in part due to the general rigidities in procedures and systems of institutional sources of credit. 3 has there been a definite reversal of this trend after 2002? we have to wait for the findings of the next all india debt and investment survey ( aidis ) to verify if the several new policy initiatives in the decade of 2000s for expanding the rural branch network and stepping up the supply of agricultural credit have resulted in commercial banks regaining the space they vacated in agricultural credit. the data pertains to total amount of credit taken by cultivator households for both production and consumption purposes. data on credit for production alone by source of credit is not available. nevertheless this does not alter the inference of the broad shift in pattern. these reasons have been illustrated in nabard ( 2010 ), report of the task force on credit related issues of farmers. bis central bankers ’ speeches table 1 : shares in total debt of cultivator households source : all india debt and investment survey, nsso, government of india, various rounds. ( ii ) increasing intensity of agricultural credit over the last 40 years, there has been a striking increase

to prevail. in particular, the recent volatility in financial markets, notably also in the exchange rate, deserves close monitoring with regard to its possible implications for the medium - term outlook for price stability. therefore, while the strong momentum of the euro area economy has clearly strengthened our confidence in the inflation outlook, patience and persistence with regard to monetary policy is still needed for inflation to sustainably return to levels of below, but close to, 2 %. in fact, the evolution of inflation remains crucially conditional on an ample degree of monetary stimulus provided by the full set of our monetary policy measures : our net asset purchases, the sizeable stock of acquired assets and the forthcoming reinvestments, and our forward guidance on policy interest rates. the relevance of central clearing for monetary policy and the role of the central bank of issue let me now turn to the interactions between financial market infrastructures and monetary policy, which you have chosen as a topic for today ’ s hearing. this is indeed an important and timely issue, particularly in relation to central clearing, on which i will focus today. allow me to recall the important role played by central counterparties – or ccps – in financial markets : by interposing themselves in a network of financial transactions, ccps reduce counterparty credit risk and increase market transparency. however, under crisis conditions, the disruption of clearing activities can have a significant negative impact on our ability to conduct monetary policy tasks. for instance, it may cause significant liquidity strains for ccp users, which in many cases are also our monetary policy counterparties. in particular, these strains may arise from large and sudden calls to provide additional resources to a ccp under stressed market conditions. in addition, disturbances affecting a ccp active in the money markets can 2 / 4 bis central bankers'speeches impair normal monetary policy transmission channels. these are just two examples of the links between the operation of ccps and the transmission of monetary policy. while these links are not new, they now warrant closer attention for two reasons. first, the financial system has come to rely more on central counterparties. the introduction of mandatory central clearing requirements in response to the crisis has made financial markets safer and more transparent. this is in large part thanks to the european parliament ’ s push for stronger financial regulation, such as the european market infrastructure regulation ( emir ). while this strengthening is of course welcome, it also means that ccps have become more systemic. second, the united kingdom ’