? let me be clear : the ecb is not driven by political considerations. it is the central bank of the 19 countries of the euro area, including greece. furthermore, the ecb cannot breach article 123 of the treaty, which prohibits monetary financing. may i also remind you that, at the time in question, the prospects for the greek economy were quickly deteriorating. since then, many things have taken a turn for the better in a very short period of time, and we have to give credit to the greek prime minister, to the greek government and really to the greek people for that. as you know, we have an important challenge ahead of us, namely the recapitalisation of the banks. one thing remains unclear to us and that is whether this is tied to the completion of the review. the eurogroup statement of 14 august is clear about the timeline and conditions for the recapitalisation of the banks. a first tranche of eur 10 billion for possible bank recapitalisation and resolution needs has already been made available. a second tranche of up to an additional eur 15 billion can be made available after the first review and no later than 15 november, subject to the completion of the planned asset quality review and stress test and the implementation of the financial sector deliverables of the review. are you optimistic that the private sector and private funding will be able to participate in the recapitalisation, given what still overshadows greece? bis central bankers ’ speeches private investors have participated in the last two recapitalisation rounds of the greek banks. whether this will also be the case in the upcoming exercise depends on the results of the comprehensive assessment and on the terms of the recapitalisation. we will soon have a better picture of banks ’ capital needs and of how private sector participation can be accommodated in the recapitalisation process. obviously, the participation of private sector agents would be desirable from the point of view of minimising the use of public funds here. private investors will certainly be more willing to commit funds to the greek banking sector if they can be assured of successful programme implementation. rapid progress towards the conclusion of the first review will contribute to this and is therefore in everyone ’ s interest. consequently, it is important that the government does its part by implementing the measures required for the first review. together with the other institutions, we are making every effort to support the government in these efforts and to ensure a timely conclusion of the first

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