of 2024. in any case, the future roll - off of the pepp portfolio will be managed to avoid interference with the appropriate monetary policy stance. third, the pandemic has shown that, under stressed conditions, flexibility in the design and conduct of asset purchases has helped to counter the impaired transmission of our monetary policy and made our efforts to achieve our goal more effective. within our mandate, under stressed conditions, flexibility will remain an element of monetary policy whenever threats to monetary policy transmission jeopardise the attainment of price stability. in particular, in the event of renewed market fragmentation related to the pandemic, pepp reinvestments can be adjusted flexibly across time, asset classes and jurisdictions at any time. this could include purchasing bonds issued by the hellenic republic over and above rollovers of redemptions in order to avoid an interruption of purchases in that jurisdiction, which could impair the transmission of monetary policy to the greek economy while it is still recovering from the fallout of the pandemic. net purchases under the pepp could also be resumed, if necessary, to counter negative shocks related to the pandemic. fourth, in line with a step - by - step reduction in asset purchases and to ensure that the monetary policy stance remains consistent with inflation stabilising at our target over the medium term, we decided on a monthly net purchase pace of €40 billion in the second quarter and €30 billion in the 1 / 4 bis central bankers'speeches third quarter under the asset purchase programme ( app ). from october 2022 onwards, we will maintain net asset purchases under the app at a monthly pace of €20 billion for as long as necessary to reinforce the accommodative impact of our policy rates. we expect net purchases to end shortly before we start raising the key ecb interest rates. we also confirmed the level of the key ecb interest rates and our forward guidance on the future path of policy rates. this is crucial for maintaining the appropriate degree of accommodation to stabilise inflation at our two per cent inflation target over the medium term. we will continue to monitor bank funding conditions and ensure that the maturing of tltro iii operations does not hamper the smooth transmission of our monetary policy. we will also regularly assess how targeted lending operations are contributing to our monetary policy stance. as announced, we expect the special conditions applicable under tltro iii to end in june next year. we will also assess the appropriate calibration of

financial union and the euro area architecture let me now turn to the governance of economic and monetary union. in times of heightened global uncertainty, it is more important than ever that europe stands together. the efforts we have made in recent years to strengthen emu governance have already made emu more resilient to shocks. however, our monetary union is still incomplete and remains vulnerable. to support confidence and continue the economic expansion, we need further convergence and integration among euro area member states. it is almost exactly six years since european leaders decided to launch banking union. this was a major step forward and it has significantly contributed to risk reduction and thus a more stable european banking sector. but banking union is not yet complete. the swift adoption of the banking package will help to further strengthen the resilience of the financial sector. we welcome the committee ’ s adoption of the report on the banking package and call for a swift trilogue process. the agreement on the european stability mechanism ( esm ) as the backstop for the single resolution fund is equally important. it will provide an additional layer of safety for banks in resolution, ensuring that they can be resolved effectively and without endangering financial stability. all this, in turn, will enhance confidence in the banking sector as a whole and make it more stable. the backstop should be made operational as soon as possible and be given swift and efficient decision - making procedures. in the period ahead, including the deliberations on a european deposit insurance scheme ( edis ), 2 / 4 bis central bankers'speeches we should not be held back by the distinction between risk reduction and risk sharing, for two reasons in particular. first, substantial risk reduction has already taken place. common equity tier 1 ratios of significant banks – a key indicator of bank health – are now 67 % higher than they were ten years ago. further risk reduction is under way with the reduction of non - performing loans and toxic assets in the portfolios of some large banks. second, risk - sharing greatly helps risk reduction. consider the united states federal deposit insurance corporation. it successfully resolved 500 banks without causing financial instability, also because it was backstopped by the us government. the corresponding number for the euro area was ten times lower, which is another reason why the euro area banking sector still faces structural challenges. in other words, if risk - sharing were to lead to an orderly management of the financial stability consequences derived from risk reduction, risk reduction would proceed at a much faster pace.