, the appropriate financing of the economy and taking into account the very significant rebalancing of inflationary risks ; second, they can be easily unwound once the financial crisis attenuates and when we see any risks of a future rise in inflation. these two features ensure that all measures taken are fully consistent with the ecb ’ s primary objective, which is to preserve price stability in the euro area over the medium term. beyond monetary policy, i see two policy priorities going forward. first, governments need to spell out how they envisage unwinding the crisis - related fiscal stimulus measures to return to sustainable fiscal positions in the medium term. this is particularly important as substantial support for the financial sector might still be needed. while this support often does not directly affect fiscal balances, it creates contingent liabilities that may have to be catered for. second, the urgent need for reform of the global financial architecture should not distract from the need for further progress with labor and product market reform in the euro area. rigorous implementation of the lisbon reform agenda remains as pressing as ever, as increased productivity and efficiency will not only foster the development of the private sector, but also facilitate the return to sustainable fiscal positions. in my remarks today, i would like first to recall the origins of the crisis. i will then explain in detail the various actions the ecb has taken to support the euro area economy and the financial system. before concluding, i will also say a few words on the specific challenges currently facing the spanish economy. the roots of the financial crisis and its propagation over the past ten years, we have witnessed a dramatic shift of focus in large parts of the financial sector – away from facilitating trade and real investment towards unfettered speculation and financial gambling. to be clear, i do not deny that financial liberalisation and financial innovation over the past two decades have made important contributions to the overall productivity of our economies. for example, the securitisation of assets – the transformation of bilateral loans into tradable credit instruments – had tremendous potential for the diversification and efficient management of economic risk. but the way securitisation was implemented also meant that banks and non - banks were able not only to sell loans, but also often to place them fully off - balance sheet immediately after they had been extended. this weakened their incentives to conduct prudent screening and constant monitoring of loans. this is true only for the most recent product innovations in the field of securitis

health. this, in turn, would worsen the quality of banksa€™ balance sheets. policy support remains essential to prevent balance sheet strains and tightening financing conditions from reinforcing each other. conclusion summing up, the euro area economy is clearly rebounding. however, the speed of the recovery continues to depend on the course of the pandemic and progress with vaccinations. the current rise in inflation is expected to be largely temporary and underlying price pressures will build up only gradually. the slight improvement in the medium - term inflation outlook and the current level of financing conditions allow favourable financing conditions to be maintained with a moderately lower pace of net asset purchases under the pepp. our policy measures, including our revised forward guidance on the key ecb interest rates, are key to helping the economy shift to a sustained recovery and, ultimately, to bringing inflation to our two per cent target. we are now ready to take your questions. 3 / 3 bis central bankers'speeches