inflation, which in turn could lead to an increasing shortfall of inflation from our objective. 1 indeed, some indicators of longer - run inflation expectations have been on the soft side in recent months. putting all of the pieces together, it appears the economy has been doing well so far this year, bolstered by confident consumers and a strong job market. and after fluctuations earlier in the year, financial markets currently appear supportive of growth, with borrowing rates low and the stock market at all - time highs. while the modal outlook is solid, the downside risks, if they materialize, could weigh on economic activity. taking into account the downside risks at a time when inflation is on the soft side would argue for softening the expected path of monetary policy according to basic principles of risk management. of course, my judgment about the actual path of policy will continue to be influenced by the evolution of the data and the risks. i am mindful that low spreads on corporate credit, together with risky corporate debt at historic highs, suggest financial imbalances are growing. we should be addressing these financial imbalances by activation of the countercyclical capital buffer, more rigorous use of stress tests, and active monitoring of leveraged lending. so what does this mean for you and the families and businesses you serve in and around 1 / 2 bis central bankers'speeches scranton? i hope and expect that the progress you have made in transforming the region ’ s economy will continue as the expansion extends into its 11th year. i am well aware of the challenges this area has been working to overcome since the great recession. and i am impressed by how much has been accomplished here. you have had important success in attracting new logistics jobs to take advantage of northeastern pennsylvania ’ s proximity to major cities. you are making important investments in the forward - looking “ eds and meds ” ( education and health - care ) sectors by leveraging the 19 colleges and universities in and around scranton. there are signs that these investments are paying off. household incomes in scranton are growing again. the area ’ s unemployment rate is close to its lowest level in the past 40 years. i look forward to hearing from the community bankers gathered here today about the outlook for families and businesses in northeastern pennsylvania and how you are helping the region invest and grow. and i am looking forward to continuing the discussions tomorrow, when i will visit with the scranton area community foundation to discuss the northeastern pennsylvania equitable transportation initiative, nepa moves,

general government primary surpluses were recorded. gains in external competitiveness : the external deficit, which exceeded 15 % of gdp in 2008, was eliminated, underpinned by a substantial increase in labour cost competitiveness vis - a - vis our trading partners and an increase in the share of exports to 32 % of gdp today from 19 % in 2009. structural reforms, notably in the labour market, but also in the goods and services markets and in public administration. unlike in other member states that also experienced similar crises, the greek crisis did not come from the banking sector. in an adverse international economic and financial environment, greece was hit by a serious sovereign debt crisis that required three economic adjustment programmes that included, inter alia, substantial structural reforms and severe austerity measures. the sharp 1 / 5 bis central bankers'speeches deterioration of the macroeconomic environment that led to a loss of more than 25 % of gdp over these years bears testimony to the fact that the greek crisis is more far - reaching and lasted longer than initially foreseen. in this adverse macroeconomic environment, unemployment increased to historic high ( post - war ) levels, and disposable income dropped substantially. at the outset of the crisis, deteriorating macroeconomic conditions and sovereign downgrades blocked access to international capital and money markets, thus creating very tight liquidity conditions and pressures to the financial sector. as a consequence, banking sector developments were unprecedented including a large - scale deterioration of greek banks fundamentals and of asset quality. the extent of the deterioration can be described in terms of losses due to the restructuring of greek government bonds held by the private sector ( private sector involvement – psi ) : greek banks suffered losses of about €38 billion in 2011, which was close to 170 % of their total core tier i ( ct1 ) capital at that time. due to the liquidity squeeze, the role of banks as intermediaries was undermined, and the channels for financing the real economy were severely disrupted. in addition, substantial deposit outflows took place from september 2009 to july 2015, primarily relating to the uncertainty of depositors regarding economic and financial developments. it is worth mentioning that the difficulties of credit institutions to provide liquidity to the real economy were further exacerbated by procyclicality, as their capital base had to be used as a buffer against unexpected risks. as a consequence, even higher capital adequacy ratios had to be met, rendering it even more difficult for banks to