so as to reap the benefits of integration and development for efficiency and growth, while safeguarding financial stability, by addressing potential systemic risks that might stem from these processes. the recent experience, the ongoing policy debate and economic research converge on the need for greater transparency, reduced financial product complexity, improved corporate governance and more effective risk management. moreover, the crisis revealed the need for a strengthened regulatory framework, enhanced macroprudential oversight, intensified micro - prudential supervision and better cross - border crisis management and resolution regimes. the list is long, but it is vital that progress continues to be made on all relevant fronts. a lot has been achieved so far, but much more remains to be done. in particular, the global regulatory reform underway and the new eu supervisory framework will greatly contribute to both financial stability and increased financial integration. the european system of financial supervisors will support financial integration by promoting a single set of micro - prudential rules and the equal treatment of market participants. in parallel, the european systemic risk board will foster financial integration by safeguarding financial stability that allows market participants to better exploit cross - border opportunities. iii. the impact of the crisis on the sovereign bond markets in the euro area let me now turn to the second issue, namely the impact of the crisis on the sovereign bond markets in the euro area. this has been significant but heterogeneous, as demonstrated by diverging yield spreads. moreover, it has varied over time reflecting the effects of different factors. the major phases in the movements in intra - euro area government bond yield differentials since the outbreak of the crisis are broadly familiar. ( slide 1 ) therefore, i will abstain from a chronological description of developments and will focus on three key factors that shaped euro area sovereign bond spreads at different stages : first, the risk transfer from the financial system to the government sector ; second, the importance of market liquidity premia ; and third, the emergence of more country - specific sovereign credit risks. iii. 1 risk transfer from the financial system to the government sector in march 2008, euro area government bond spreads showed the first discernible increases since the beginning of the crisis in summer 2007. thereafter, spreads abated somewhat but did not return to pre - crisis levels. intra - euro area sovereign bond spreads picked up appreciably after the bankruptcy of lehman, reflecting “ flight to quality ”, but they widened substantially in october 2008, when eu governments announced large fiscal stimulus packages and comprehensive measures to support

inflation outlook is surrounded by significant uncertainty, and we will continue to follow a data - dependent approach to determining the appropriate level and duration of restriction. annexes 7 july 2023 slides english 1. i would like to thank thomas mcgregor, annukka ristiniemi, eliza lis, malin andersson, belen gonzalez, bruno fagandini, anna beschin and giulia gardin for their contributions to this speech. 2. de santis, r. a. and stoevsky, g. ( 2023 ), “ the role of supply and demand in the post - pandemic recovery in the euro area ”, economic bulletin, issue 4, ecb. 3. hahn, e. ( 2023 ), “ how have unit profits contributed to the recent strengthening of euro area domestic price pressures? ”, economic bulletin, issue 4, ecb. 4. for a comprehensive discussion of this topic, see lane, p. r. ( 2022 ), “ inflation diagnostics ”, the ecb blog, 25 november. 5. rubene, i. ( 2023 ), “ indicators for producer price pressures in consumer goods inflation ”, economic bulletin, issue 3, ecb. 6. the increase in services inflation mainly reflects the increase in services inflation in germany, which increased to 6. 1 % from 4. 4 % due also to an upward base effect following the temporary introduction of the 9 euro ticket in june 2022. 7. arce, o., hahn, e. and koester, g. ( 2023 ), “ how tit - for - tat inflation can make everyone poorer ”, the ecb blog, 30 march. 8. see also lane, p. r. ( 2023 ), “ underlying inflation ”, lecture at trinity college dublin, 6 march. 9. the ecb monitors several indicators of underlying inflation. these can be broadly grouped into three categories : ( i ) exclusion - based measures, ( ii ) trimmed measures, and ( iii ) model - based measures. 10. ehrmann, m., ferrucci, g., lenza, m. and o ’ brien, d. ( 2018 ), “ measures of underlying inflation for the euro area ”, economic bulletin, issue 4, ecb. 11. hahn, e. ( 2023 ), op. cit. 12. see also lane, p. r. ( 2023