link our asset purchases to our objective. today – after those three rounds of recalibrations – we say that the app is intended to run until the end of march 2017, or beyond, if necessary, and in any case until the governing council sees a sustained adjustment in the path of inflation consistent with our objective. at our last monetary policy meeting in march we also clarified the interaction between our rate and asset purchase guidance, namely that we expect the key ecb interest rates to remain at present or lower levels well past the horizon of our net asset purchases. transmission channels of the credit easing package our decision to respond to emerging shocks by rescaling our existing measures – rather than adopting new ones – has hinged on our confidence that those measures are effective in lifting inflation back towards our objective. this is based on two assumptions about the monetary transmission process : first, that our policy package has led to improved financial and borrowing conditions ; and second, that improved financial and borrowing conditions have led and will lead to higher real activity, reduced economic slack and upward pressure on inflation. how justified are we in making these assumptions? in principle, the mechanisms through which our policy measures should boost the economy are clear. they are designed to work as a package, easing financial conditions through a combination of mutually reinforcing chung, h., j. - p., laforte, d. reifschneider and j. williams ( 2011 ), “ have we underestimated the likelihood and severity of zero lower bound events? ”, federal reserve bank of san francisco working paper series, january 2011. coenen, g. ( 2003 ), “ zero lower bound : is it a problem in the euro area? ”, ecb working paper series no. 269, september 2003. ecb analysis looking at time - varying sensitivity of forward rates to surprises, using daily rolling regressions, finds that since the introduction of forward guidance forward rates with maturity up to 3 - year have been less sensitive to macroeconomic surprises. this has been important to keep markets focused on levels – i. e. the degree of slack in the economy – and not on rates of change – i. e. the latest conjunctural indicator. bis central bankers ’ speeches channels. this contributes to a lower cost of debt finance, a lower cost of equity and a lower exchange rate, all of which contribute to raising consumption and investment. first, via the portfolio rebalancing channel, the measures lower yields

benoit cœure : financial regulation and innovation - a two - way street introductory remarks by mr benoit cœure, member of the executive board of the european central bank, at a roundtable organised by finleap, berlin, 14 march 2018. * * * let me thank finleap for organising this roundtable. it is no surprise that we are having this discussion here in berlin, which has quietly emerged as a european capital when it comes to fintech. over 200 fintech companies already call berlin home, and this number is growing by the day. 1 i hope that this morning ’ s roundtable can provide a platform to exchange experiences and stimulate discussion. that central banks take a keen interest in fintechs should not come as a surprise. as evidenced by the financial stability board, crowd funding and peer - to - peer lending have the potential to affect bank lending services. e - trading and robo - advice may change the way banks provide investment management and advisory functions and therefore the way savings are channelled to the economy. 2 and it is fair to say that the current frontier of innovation falls squarely within central banks ’ remit – that is, the provision of payment services. 3 the challenge for regulators is to balance the obvious benefits that fintech innovations may have for growth and welfare with their potential risks. after all, the history of financial innovation is littered with examples that led to early booms, growing unintended consequences, and eventual busts. the interaction between financial regulation and innovation is a two - way street, however. it is not just that change in the financial sector will impact the way we do regulation. regulatory initiatives will also affect the direction and speed of transformation in the financial sector, with all the repercussions this implies for monetary policy, financial stability and the way firms and households manage their finances. pre - emptively drawing in the reins in the name of financial stability could stifle innovation, prevent fintechs from developing important economies of scale, and deprive small businesses and households of the benefit of technological progress. on the other hand, allowing risks to accumulate in an unregulated sector may undermine financial stability and undo the benefits of past regulatory efforts. banking services could migrate to less - regulated parts of the financial system unless the provision of similar services with similar risks is regulated in a similar way. we ’ ve been here before : decisions taken 20 years ago to leave otc derivatives largely unchecked created