worsen exchange rate and inflation expectations, and make it harder for ukraine to access the international capital markets in order to repay the heavy debt load of the coming years. there are other significant risks. they include : the continued cooling of the global economy and a further deterioration in terms of trade an escalation of the military conflict in eastern ukraine and new trade restrictions introduced by russia a drop in the harvest of grain, fruit and vegetable crops in ukraine in the wake of unfavorable weather the higher volatility of global food prices, driven by global climate change a decrease in foreign capital inflows. why did the nbu decide to cut the key policy rate by as much as 2. 5 pp? the balance of risks has practically remained unchanged since the previous monetary policy 2 / 3 bis central bankers'speeches meeting, while inflation has slowed down to its target of 5 % ± 1 pp even faster than the nbu expected. under such conditions, the nbu has decided to cut the key policy rate by as much as 2. 5 pp. this is another step towards creating favorable conditions for reviving lending to the real sector and speeding up economic growth. what will the nbu ’ s monetary policy stance be in future? in light of the more rapid improvement in ukraine ’ s macroeconomic conditions, the nbu has now somewhat more ambitious plans compared to when it published its october forecast. if the inflation rate stabilizes in its target range of 5 % ± 1 pp, the key policy rate could be reduced to 7 % by late 2020. the nbu estimates the new neutral level of the key policy rate to be precisely at 7 %. the most pronounced cuts in the key policy rate are expected to take place in h1 of the current year. this will lead to further decreases in loan rates for businesses and households, thus stimulating business activity. this is our baseline scenario. if the above inflation risks materialize, the key policy rate could be decreased more slowly. conversely, faster implementation of reforms, coupled with significant investment inflows, could enable the nbu to cut the key policy rate at a quicker pace. thank you for your attention! 3 / 3 bis central bankers'speeches

exact data on that gap are difficult to come by. estimates suggest that it might reach up to 40 % for a fully collateralised loan. 15 4 / 7 bis central bankers'speeches reduction of that gap, which has many causes, requires a comprehensive strategy. determined structural reforms should play a prominent role in the action plan for national and european authorities, regardless of the actual solutions adopted by individual countries. for instance, debt enforcement procedures should be streamlined, and their cost lowered. this may require in particular that judicial and out - of - court capacity is increased. to mitigate the information asymmetry, access to financial information about distressed debtors and public data registers should be made easier. investment in improving quality of that information is often needed, and may be rewarded by investors with higher transaction prices. within the comprehensive strategy, there may be a role for national governments to support the correction of the npl market failure. necessary structural reforms may require a lot of time to yield fruit and to earn credit with investors. this is a very tangible issue also in italy, where recent reforms of the debt enforcement claims have not yet produced the expected results, and therefore have not influenced npl prices to the desired extent. asset management companies ( amcs ) may aid in correcting the market failure. they can swiftly clean up npls from bank balance sheets, and resolve them over a longer period of time. acquisition of assets at their long - term economic value, instead of market value which is depressed by low liquidity and high uncertainty, minimises fire sale losses. sweden, germany, ireland, spain, slovenia and korea, for example, used these tools to manage their banking crises, often with a focus on loans backed by real estate. there is one common feature in this type of amc : state support. by putting capital and funding guarantees at stake, governments can signal their commitment to the structural reforms and bring forward the related benefits. a similar role may be played by securitisation schemes. 16 the eu legal framework does not close the door to setting up an amc with government sponsorship. the rules also allow for precautionary recapitalisation of banks by the public sector in cases of significant financial stability concerns, subject to strict conditions laid down in the brrd ( art. 32, 4 ), covering hypothetical losses estimated under an adverse scenario of a stress test. precautionary recapitalisations also have to respect state aid rules that generally require bail - in of