for shaping our policy stance will become the path of our key policy rates and forward guidance about their likely evolution. finally, we have stated that we stand ready to adjust all of our instruments as appropriate to ensure that inflation continues to move towards our medium - term aim of inflation below, but close to, 2 %. adjustments to our instruments will remain predictable, and they will proceed at a gradual pace that is most appropriate for inflation convergence to consolidate, taking into account continued uncertainty in the economy. in short, monetary policy in the euro area will remain patient, persistent and prudent. 1 the gdp series used to compute the euro area “ synthetic ” aggregate come from the euro area wide model ( awm ) database and eurostat and covers the period 1970 q1 – 2018 q1. 2 in annual terms, employment is not growing only in lithuania. 3 european commission data and ecb calculations. as growth accounting exercises are sensitive to the underlying assumptions, exact numbers should be treated with caution. 4 european commission ( 2018 ), european economic forecast, spring 2018. 5 see for example draghi, m ( 2017 ), “ accompanying the economic recovery ”, speech at the ecb forum on central 5 / 6 bis central bankers'speeches banking, sintra, 27 june. 6 see szorfi, b. and toth, m. ( 2018 ) : measures of slack in the euro area, economic bulletin, issue 3, ecb. 7 see fabiani, et al. ( 2006 ), “ what firms ’ surveys tell us about price - setting behavior in the euro area ", international journal of central banking, 2 ( 3 ) : 3 - 47. 8 persistent and common component of inflation. 9 draghi, m ( 2017 ), op. cit. 10 coenen et al. ( 2017 ), “ communication of monetary policy in unconventional times ”, working paper series, no. 2080, ecb. the authors find that clearly communicated forward guidance can help reduce market uncertainty. 11 draghi, m. ( 2018 ), “ monetary policy in the euro area ”, speech at the ecb and its watchers xix conference organised by the institute for monetary and financial stability, frankfurt, 14 march 6 / 6 bis central bankers'speeches

inflicting damage on third parties through our own failure. a second phenomenon, which is germane to switzerland, is the fact that - in comparison with other countries - the two big banks, cs and ubs, garner a very significant share of all banking transactions. without doubt, this results in a high concentration of risk, but also yields some significant advantages. two such advantages stand out : - the collective efforts of our banking sector are governed by a natural leadership structure which facilitates and accelerates development processes, - and, secondly, the two big players act in some measure as know - how brokers, swiftly incorporating the year 2000 experiences gained abroad into the process of solving the problem in this country. more generally speaking, our long tradition of practical cooperation between competitors and of close ties between regulators and banks is a distinct plus in the preparatory work. jointly managed institutions like the swiss exchange, our central securities depository, or the swiss interbank clearing system are well - known examples of this spirit of cooperation. i am confident that the large - scale interbank tests scheduled to begin in may will provide us with a positive picture of the state of preparations. assuring liquidity from the viewpoint of a central banker, assuring adequate liquidity must be the prime concern. based on the nature of their business, banks are inherently vulnerable. withdrawals and redistribution of deposits can jeopardise the banks ’ capacity to pay. such effects, should they materialise at all, may take place as a millennium shadow before or during entering the next millennium. it is primarily the duty of individual banks to brace themselves for such events. they must undertake careful liquidity planning, comprising both a normal scenario as well as different stress scenarios. they must have a clear idea where, in what form, and to what extent they can cover their liquidity needs and make the necessary limits and collateral available. in this process, it is crucial that banks interfacing with large customers - enter into agreements with one another, thus creating a high degree of transparency. the goal is to limit the range of unexpected behavioural changes by creating transparency and reaching an understanding. looking at the issue from this vantage point also makes it clear that a strategy of avoiding transactions is completely contra - productive. even though it makes sense to avoid settlement dates of forward contracts falling immediately before and after the millennium transition, it is vital that transactions can be carried out and that markets remain liquid. it is at least conceivable that smaller banks or