spain. recent monetary policy conduct let me turn now to recent monetary policy conduct. monetary policy in the euro area has been progressively adapted to medium - and long - term inflation expectations, in a setting marked by the weakness of economic growth in the area. the armoury of instruments used by the ecb includes conventional or standard measures – such as interest rate movements and the provision of liquidity in its ordinary refinancing operations – together with non - standard or extraordinary measures, among which the setting of negative interest rates on the discount facility, and long - term liquidity - provision and assetpurchase programmes. the need to keep the deflationary risk at bay, i. e. to keep inflation expectations anchored in the proximity of the ecb ’ s objectives, has been pivotal in determining the successive steps to be taken in terms of monetary easing. in june 2014, the ecb cut its official interest rates, setting the main refinancing operations rate at 0. 15 %. also, for the first time, it set the interest rate on the deposit facility in negative territory, at – 0. 10 %. in addition, it announced new long - term refinancing operations maturing in september 2018, with the specific aim of boosting lending. it is worth noting that these operations combine credit - enhancing elements, as they link the granting of liquidity to bank lending, with quantitative easing, through the expected increase in the eurosystem balance sheet. in september 2014, the ecb adopted new measures. first, it made a fresh cut to interest rates, whereby the mro rate stood at 0. 05 %, its technical minimum, and the deposit facility rate became even more negative, reaching – 0. 20 %. furthermore, the ecb initiated asset purchase programmes. in the fourth quarter of 2014, the ecb launched its third covered bond purchase programme and, subsequently, its abs purchase programme. by end - march, covered bond purchases had reached almost €63 billion, with slightly over €7 billion of these being made by the banco de espana. as to abs purchases, these stood at €4. 6 billion at end - march, indicating that this was evidently a less significant component of the programme. in january 2015, the ecb decided to add a third programme, called the “ expanded asset purchase programme ”. this involves government bond purchases and marks the launch of quantitative easing. bis central bankers ’ speeches adding government securities and paper issued by supr

this issue, and in august 2003 the committee published a set of principles to promote closer practical cooperation and information exchange among supervisors. the principles re - emphasise the traditional responsibilities of home and host supervisors, but also how those responsibilities will continue under the new framework on the basis of enhanced co - operation. more recently, at the beginning of may, the committee published an elaboration of the principles. of course, we recognise that the objectives we are seeking cannot be achieved overnight and that they are dependent on building good relations and trust between supervisors. as part of this effort, the aig will be meeting again with the core principles liaison group ’ s working group on capital in the middle of this month. among other things, the two groups will discuss cross - border issues and case studies and will exchange current thinking on implementation strategies. i believe that each and every effort and initiative to improve communications between supervisors around the world should be strongly encouraged. 4. moving to the new framework these are just a few examples of how basel ii has been improved to make it more suitable for national circumstances and domestic banking systems in many countries. the members of the committee and i recognise, and we have consistently stressed, that only national authorities can decide when to adopt basel ii. adopting basel ii on the same timetable as the member countries of the basel committee is not feasible for all countries. in fact, basel ii may be a lesser priority compared to other ongoing efforts to promote the fundamentals of safety and soundness in each country ’ s banking system. all of us must think long and hard about the state of our markets, our banking systems, and our supervisory structures to determine when we are ready to adopt the new approach to banking supervision that basel ii implies. of course, the committee hopes that, over time, more and more countries will adopt the framework. we do not want them to do so before they are ready. and, when they are ready, we want them to adopt the options and approaches that are most appropriate for their circumstances. for a country that wishes to adopt basel ii but may not yet be ready, i would suggest a three - stage approach to the transition to basel ii. these stages could be categorised as ( 1 ) strengthening the supervisory infrastructure ; ( 2 ) introducing or reinforcing the three pillars ; and then ( 3 ) making the transition from the 1988 accord to basel ii. this three - stage process recognises that basel ii is not intended simply to ensure compliance with a