euro area bank lending survey for the third quarter of 2016 indicates some further improvements in both supply and demand conditions for loans to the non - financial private sector. furthermore, banks continued to report that the ecb ’ s asset purchase programme and the negative deposit facility rate had contributed to more favourable terms and conditions on loans. to sum up, a cross - check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed the need to preserve the very substantial amount of monetary support that is necessary in order to secure a return of inflation rates towards levels that are below, but close to, 2 % without undue delay. monetary policy is focused on maintaining price stability over the medium term and its accommodative stance supports economic activity. as emphasised repeatedly by the governing council, and as again strongly echoed in both european and international policy discussions, in order to reap the full benefits from our monetary policy measures, other policy areas must contribute much more decisively, both at the national and at the european level. the implementation of structural reformsneeds to be substantially stepped up to reduce structural unemployment and boost potential output growth in the euro area. structural reforms are necessary in all euro area countries. the focus should be on actions to raise productivity and improve the business environment, including the provision of an adequate public infrastructure, which are vital to increase investment and boost job creation. the enhancement of current investment initiatives, including the extension of the juncker plan, progress on the capital markets union and reforms that will improve the resolution of non - performing loans will also contribute positively to this objective. in an environment of accommodative monetary policy, the swift and effective implementation of structural reforms will not only lead to higher sustainable economic growth in the euro area but will also make the euro area more resilient to global shocks. fiscal policies should also support the economic recovery, while remaining in compliance with the fiscal rules of the european union. full and consistent implementation of the stability and growth pact over time and across countries remains crucial to ensure confidence in the fiscal framework. at the same time, all countries should strive for a more growth - friendly composition of fiscal policies. we are now at your disposal for questions. 2 / 2 bis central bankers'speeches

bankers'speeches this is clearly desirable, but it will create some costs during the transition. supply chains need to be restructured and the energy supply reorganised, while greening the economy is likely to increase pressure on some of the metals and minerals that are already in short supply. electric vehicles, for example, use over six times more minerals than conventional cars. 5 so, europe needs a plan to ensure that the necessary investment comes online as quickly and smoothly as possible, with public and private finance reinforcing each other. the next generation eu facility – the €750 billion fund set up to aid the recovery from the pandemic – will help spur public investment over the next few years. almost 40 % of spending has been allocated to the green transition. here in cyprus, you are already building a new lng import terminal, funded largely by grants from the eu6 and loans from the european investment bank. but we need private finance to step up as well, and for that we need to better mobilise europe ’ s large pool of private capital. at present, capital markets in europe are segmented along national lines rather than spanning the continent. that is why the capital markets union – the project to integrate europe ’ s capital markets – has become more important than ever. for our part, the ecb has made it clear that, in the context of the ongoing conflict, we will take whatever action is needed to pursue price stability and safeguard financial stability. we have also put in place a policy response which is tailored to the uncertainty we face today. as i explained last week7 the best way that monetary policy can navigate this uncertainty is to emphasise the principles of optionality, gradualism and flexibility. first, optionality means that we are prepared to react to a range of scenarios, and the course we take will depend on the incoming data. in particular, if the incoming data support the expectation that the medium - term inflation outlook will not weaken even after the end of our net asset purchases, we will conclude net purchases under the asset purchase programme ( app ) in the third quarter. but if the medium - term inflation outlook changes and if financing conditions become inconsistent with further progress towards our 2 % target, we stand ready to revise our schedule for net asset purchases in terms of size and / or duration. second, gradualism means that we will move carefully and adjust our policy as we receive feedback on our actions. any adjustments to the key ecb interest rates