go into more detail as regards issues related to timing. ii. exit from what? – enhanced credit support let me start by taking up things from where i left them a year ago. when i addressed this conference at the beginning of september 2008, i reflected on the direction in which the economy was headed. i looked back over the preceding 12 months of financial turbulence, noting that this had marked the end of “ a long phase of heightened risk tolerance ”. at the end of my speech i expressed concerns that the correction of financial imbalances, and the associated re - pricing of risk, might not have run its full course. as we now know, this was indeed the case. only ten days later, the re - pricing in markets took a quantum leap. in mid - september the turbulence turned into a full - blown crisis. the chart of money market spreads tells this tale clearly. as you can see, credit spreads soared. financial market activity fell dramatically, volatility spiked and the global financial system came close to seizing up. central banks stepped into the breach, addressing this unprecedented market failure. the ecb was in the vanguard of actions to contain these intensified tensions, taking a number of standard and non - standard measures. the measures by the leading central banks eventually paid off. as you see in the chart, money market spreads – a symptom of the market failures that i mentioned – retreated from their peaks. they are now back at levels comparable to those before the intensification of the crisis last year. but they still remain elevated in a longer time perspective. the crisis triggered a freefall in economic activity. the chart shows that within a few months only, from january to july 2009, the projections for 2009 shifted massively to the left, in highly negative territory. after they centred around - 1. 5 % in january 2009 and - 3. 2 % in april 2009, they dropped to - 4. 5 % in july, entirely outside the distribution range still a few months earlier. one important element of the ecb ’ s actions has been the non - standard measures i have described as “ enhanced credit support ”. 1 this support collectively defines the special and primarily bank - based measures to enhance the flow of credit over and above what could be achieved through policy interest rate reductions alone, and avoid a systemic liquidity threat. as you know, the ecb ’ s enhanced credit support comprises five elements : • the full allotment of banks ’ demands for central bank

different in the western balkans region or elsewhere. the best contribution central bis central bankers ’ speeches banks can make is to remain focused on their mandate, and to fulfil that mandate in the context of a sound institutional framework that ensures their independence. in the specific case of the euro area, something more than good policies was needed to overcome the exceptional crisis that was posing challenges to the very foundations of economic and monetary union ( emu ). the authorities have responded to the related challenges by significantly strengthening the institutional architecture of emu. in the field of banking, this has led to a decision on the establishment of a banking union. it will be centred around two main pillars, a single supervisory mechanism ( ssm ) and a single resolution mechanism ( srm ). it will contribute to the stability of the euro area financial system, help to overcome financial fragmentation and, therefore, also facilitate the conduct of monetary policy. now that political agreement has been reached, we are currently in the implementation phase. for the ecb, this means preparing for the operational start of the ssm in november 2014. to this end, we are currently undertaking a comprehensive assessment of euro area banks ’ balance sheets. this exercise will be instrumental in restoring confidence in the euro area ’ s financial system and will thereby support a revival of bank lending. it will thus also have implications for the western balkans. moreover, given the prominent role of euro area banks in the banking sector of this region, the establishment of the ssm will further intensify our institutional relations. for a substantial proportion of the foreign - owned banks operating in the western balkans, the ecb will become the home supervisor. in addition to enhancing financial stability in the euro area, and thus the home region of parent banks with subsidiaries in the western balkans, the ssm has the potential to facilitate home - host country cooperation in banking supervision. host supervisors in the region will have only one counterpart as home supervisor for a large part of their banking sector, instead of several, as is currently the case. in order to reap the benefits of this simplification, appropriate mechanisms for cooperation between the ssm and local authorities will need to be developed. let me conclude by saying that, as i have highlighted earlier, we not only have a number of policy challenges in common, but also share a common future. with the programme of technical cooperation that we are launching today, and for which we will be signing the first interim report adopted by its programme steering committee,