these rates are of prime importance not only for the refinancing costs of the banking sector, but for the pricing of loans to households and firms and, hence, crucially determine the wider financing conditions in the economy. this doesn ’ t mean that our standard toolkit played no role in our crisis response : confronted with downside risks to price stability after the lehman collapse, we swiftly cut our main policy rates to record lows. but further action was necessary to confront impairments to monetary policy transmission. here, three measures have taken a prominent role. bis central bankers ’ speeches first, we provided term - funding support to euro area banks through long - term refinancing operations. this measure avoided a major credit crunch when interbank lending dried up. second, we removed unwarranted and self - reinforcing fears of euro breakup by announcing outright monetary transactions. this measure mitigated major impairments in monetary policy transmission when sovereign bond spreads spiralled to fundamentally unjustified levels. third, we provided more explicit communication on the likely future orientation of our key monetary policy rates, including on the deposit facility, through forward guidance. this measure aligned market expectations more closely with our policy intentions when disturbances from within and outside the euro area interfered with our monetary policy stance. especially in extraordinary situations when, for example, policy rates are at, or close to, their effective lower bound, or when the normal channels of monetary policy transmission are impaired, or when there is exceptional uncertainty on the state of the economy, there is extra value in making central bank communication more explicit. so do these rather non - standard monetary policy measures mean the ecb has become more unorthodox during the crisis? again, the answer is : no. we have employed non - standard – not un - orthodox – monetary policy instruments precisely for the reason to achieve our orthodox monetary policy objective of price stability. in fact, the described challenges to the conduct of monetary policy during the crisis have required a more expanded set of tools to fulfil our price stability mandate. hence, they were an expression rather than a renunciation of our predictable monetary policy strategy with a medium - term orientation. vice versa, the anchor established through our price stability objective has allowed us to tailor our toolkit to the challenges at hand – without unanchoring inflation expectations. going forward, we must ensure that our policies continue to complement the adjustment in the euro area economy. at the same time, it must be clear that

be made available to authorities to mitigate the build - up of systemic risk during times of financial exuberance. they should also support the sector ’ s ability to meet potential funding needs under stress, including from margin calls. strengthened supervisory powers at eu level could further contribute to a timely and consistent use of liquidity management tools. moreover, the regulatory framework for money market funds should be re - assessed in the light of specific vulnerabilities in the sector. beyond a strong macroprudential mandate and an adequate toolkit for the non - bank financial sector, accelerating progress towards completing the capital markets union remains a key priority. this is particularly important in the current situation, as integrated and resilient european financial markets could help support the economic recovery. first, deep and integrated capital markets can complement bank lending, thus ensuring access to funding for a wide range of businesses. this would contribute to a swift recovery of economic activity. and second, the risks that materialised during the pandemic have highlighted the need to increase the resilience of the financial sector to large exogenous shocks. this underscores the importance of the europe - wide supervision of capital markets, which would enhance cross - border risk monitoring and coordinated action across europe. conclusion let me conclude. in the wake of the coronavirus pandemic, the euro area financial system has faced an economic shock of global breadth and of enormous scale and speed. policy measures 3 / 4 bis central bankers'speeches have so far helped prevent a health crisis turning into a systemic financial crisis, but mediumterm risks to financial stability have increased markedly. despite pre - existing vulnerabilities, the euro area financial system has weathered the immediate stress relatively well, thanks to the regulatory reforms of the past decade and bold policy responses by monetary, fiscal and prudential authorities. the forceful fiscal policy response to the pandemic by euro area governments acted as a first line of defence : introducing discretionary support measures and letting automatic stabilisers act as intended was absolutely necessary. however, this response raises fragmentation issues and will significantly increase public debt. the size of national responses and the design of guarantees differ across countries. large differences in loan guarantee packages can distort the level playing field for corporates and banks in the euro area and contribute to financial fragmentation. very large guarantee envelopes may, for example, allow companies operating in the country in which these envelopes are granted to access credit on a much larger scale, which could