zero but the latest inflation rate is at 0. 2 percent while real interest rates are even slightly above their levels of 2014. nominal interest rates can only increase when our policies become successful in the medium - term and inflation is closer to our official target. in addition to pursuing interest rate policy, the ecb has adopted a number of non - standard monetary policy measures since 2008, including a large scale asset purchase programme, targeting an improvement in financial conditions. the goal of our current monetary policy stance is to incentivise economic risk - taking, in the form of better financing conditions for households and firms. we are, of course, very much aware that side effects are also present, in particular in the form of excessive asset valuations or excessive risk - taking by market participants. we are following these developments very closely, notably in relation to risks posed by asset valuations and the search for yield phenomenon. our assessment at present, monitoring a range of asset markets, is that there are no signs of generalised overvaluations in the euro area. at the same time, the banking sector is more resilient, with higher capital ratios, and financial stability conditions are currently fulfilled in spite of the existent risks. the external environment of the euro area has deteriorated since the asset purchase programme began. in particular, concerns about growth prospects in emerging markets and unfavourable developments in financial and commodity markets have signalled downside risks to the outlook for growth and inflation, relative to the latest ecb staff projection from september. headline inflation is again at zero and core inflation has not consolidated a more positive development, which points to the need to reassess our policy stance in order to achieve our goals by 2017. eurosystem staff is currently analysing the impact of the recent external events on the euro area, in particular on the speed of adjustment of the inflation rate to levels consistent with price stability. the next eurosystem staff forecast, due in december, will help the governing council re - examine whether the current degree of monetary accommodation remains appropriate. further monetary policy options are available should the council determine that changes to the current policy stance are required. the role of other economic policies allow me now to turn to the role of other economic policies. the transmission mechanism from monetary policy decisions to inflation involves the real economy. with a negative output gap there is a “ divine coincidence ” between the objective of normalising inflation and that of expanding aggregate demand to reduce the slack in the economy and put

for this easing is that the elections in france, the netherlands and austria did not yield a positive outcome for eurosceptic parties. to sum up this first part we can say that financial markets are currently in quite good shape, driven by an improved economic outlook, benign political developments and an accommodative monetary policy stance. 3. the financial crisis : monetary policy undergoing change the mandate of the eurosystem states quite clearly that maintaining price stability in the euro area is our overriding priority. that is why we conduct monetary policy. in august, the euro area annual consumer price inflation ( hicp ) was 1. 5 %. this is still below the targeted inflation rate of less than, but close to 2 % per year over the medium term. however, the risk of deflation is now universally considered to be very low. in 2014, things looked different : the euro area inflation was steadily declining and bottomed out at – 0. 6 % in january 2015. but this risk has decreased – also supported by our monetary policy measures. the ecb governing council has been pursuing an accommodative monetary policy stance for a while. since june 2014, a move known as quantative easing has been implemented by the eurosystem in order to bolster financing conditions for banks and the real economy. at the same time credit easing has been extended. the main measures were, briefly : targeted longer - term refinancing operations ( also known as tltros ) that provide financing to banks for up to four years, with the amount that an individual bank can borrow being linked to its loans and lending patterns to the private sector, at extremely favourable ( in some cases, negative ) interest rates ; various asset purchase programmes, grouped under the umbrella acronym app ( expanded asset purchase programme ) : an additional covered bond purchase programme ( cbpp3 ) ; an asset - backed securities purchase programme ( abspp ) ; a corporate sector purchase programme ( cspp ) ; and the large - scale public sector purchase programme ( pspp ) as the main instrument to address weak inflation ; the affirmation that full allotment in regular refinancing operations will continue at least until the end of 2017 ; and in terms of policy rates, a very low interest environment with the main refinancing rate, 2 / 4 bis central bankers'speeches which has stood at 0 % since march 2016, and the negative deposit rate ( negative since june 2014 ; currently – 0. 4 %