being largely repaired, are expected to support real income and consumption looking ahead. in my view, the degree to which the u. s. economy continues on this path of solid employment creation as well as the normalisation of its monetary policy, will be key in determining how global economic developments unfold in the period ahead. equally important for the shaping of the global economic outlook are developments in china. the chinese economy has been experiencing a gradual transition to a new growth model. in this context, growth is undergoing a gradual slowdown which is in line with the new growth target range, yet it continues to be underpinned by policy support as well as by a rapid credit expansion. the greater stability in financial markets and the renminbi exchange rate have helped in alleviating some of the uncertainty, which was particularly high at the start of the year. across other emerging markets, growth momentum remains relatively weak and heterogeneous. activity has by and large remained resilient in commodity - importing countries and very weak in commodity exporting countries, particularly russia and brazil. in sum, while i expect the recovery in the global economy to gather momentum as the headwinds eventually dissipate, there are many factors which could potentially derail it. and from the euro area ’ s perspective, i expect support from external demand to be considerably lower in the future when compared to the pre - crisis years, even if none of the downside risks materialise. longer - term growth trends these cyclical developments have been accompanied by unfavourable long - term global trends affecting economies ’ growth potential. indeed, there is a growing chorus among ecb staff estimates suggest that, had there been no asset purchase programme ( including the recalibration of december 2015 but not including the march 2016 package as it is currently assessed by staff in the context of the projection exercise that will become available in june ), inflation would have been negative in 2015. ecb assessments also suggest that the asset purchase programme ( including the recalibration of december 2015, but not including the march 2016 package as it is currently assessed by staff in the context of the projection exercise that will become available in june ) will contribute to raising the gdp of the euro area by around 1. 6 % in the period 2015 – 18. bis central bankers ’ speeches commentators and academics postulating that even when all the impediments from the crisis are surmounted, there may be unrelated secular forces at play which have shifted

twelve agencies, in general staffed by long - serving bank of england people, constantly collecting information at the grass - roots level from their many business contacts. and the information, which they provide direct to the mpc on a monthly basis, can often prove helpful : either in helping us unravel inconsistencies in the data ; or, as was the case in the summer and autumn of 1998, alerting us to problems in the economy before they show up in the official data. notwithstanding the help of the agents, problems with interpretation of the data abound. some of these will be discussed in our quarterly inflation report, due to be published on thursday this week. i hope you will have the opportunity to read it. financial stability perhaps i could now turn from monetary policy matters to financial stability ; and to the second part of my job as the deputy governor responsible for this part of the bank ’ s work. go back a little over three years and the bank had a large department with four hundred and fifty staff supervising banks. hard on the heels of the decision to grant the bank independence, the government decided in may 1997 to establish the financial services authority bringing together existing uk financial regulators and supervisors under one roof. the decision was intended to streamline the uk regulatory framework and, recognising that the distinction between different types of financial firms had begun to blur, to bring together financial regulation in a single organisation and under a single piece of legislation, the financial services and markets act. in a world crowded with acronyms, this gave an opportunity for something of a cull, consigning the numerous self - regulatory organisations or sros - like sfa, imro and pia to history! however, while you may be able to take financial supervisors ( quite literally ) out of a central bank, you cannot remove all responsibility from a central bank for the safe - running of the financial 7 system. the bank stands at the heart of the financial system not only in the implementation of monetary policy, monitoring the financial intermediaries that make up the transmission mechanism for policy changes, but also operationally, as a market participant : on a daily basis carrying out open market operations or providing final settlement for payment systems across accounts at the bank ; or, in more extreme circumstances, intervening in the market to support the currency or to provide liquidity to a bank in difficulty. thus, while responsibility for supervision of individual banks has moved to canary wharf, the bank has retained responsibility for maintaining the