the governing council of the ecb, the need for increased vigilance with respect to upside risks to price stability at the beginning of october 2005. by the end of 2005, the regular cross - checking of the economic and monetary analyses indicated that an adjustment of the very accommodative stance of the ecb ’ s monetary policy was warranted to address these risks. therefore, the governing council decided to increase the key ecb interest rates by 25 basis points, first on 1 december 2005 and then again on 2 march 2006. interest rates are still at very low levels in both nominal and real terms. short - term real interest rates ( such as the three - month euribor deflated by current hicp inflation ) have increased to reach positive levels over the past few months, but remain close to their lowest levels in decades. our monetary policy thus remains accommodative. as i said in my last press conference, to safeguard the successes of the past, the governing council is in a position of strong vigilance to ensure that risks to price stability do not materialise, thereby making an ongoing contribution to sustainable economic growth and job creation in the euro area. the single monetary policy has proved successful in anchoring inflation expectations in the turbulent context of recent quarters. however, it is important to remember that the single currency and the single monetary policy for the euro area are very long - term projects. many benefits stemming from the single currency are of a structural nature and will become even more obvious over a longer period of time. moreover, the achievements of the single monetary policy should not be seen in isolation from the broader process of economic integration in europe. the introduction of the euro has helped to consolidate the tremendous gains derived from european economic integration over past decades. i also strongly believe that the euro is and will continue to be a key catalyst for further integration. nowhere is this more apparent than in the financial domain. european financial integration i now turn to my second theme, namely the process of european financial integration. i will address both the progress of financial integration over the past seven years since the introduction of the euro and also some challenges that lie ahead. the euro ’ s success : its performance with respect to european financial integration to start, i would like to recall why progress in european financial integration is seen to be highly positive. from the eurosystem ’ s perspective, we generally distinguish four main benefits arising from financial integration. first, financial integration is of key importance for the conduct

bernanke ( 2020 ) is one of those who has argued that quantitative easing has worked, in the sense that it has contributed towards making monetary policy more expansionary. consequently, it may also become a permanent part of the monetary policy toolbox going forward – at any rate if the level of the real interest rate continues to hold short - term nominal interest rates at the lower bound. quantifications made at the riksbank also indicate that purchases of government bonds have had a significant effect. 11 however, there is a limit for how much long - term interest rates can be pushed down in sweden. partly, this is because the swedish national debt office has a facility that creates possibilities for an arbitrage if the long - term interest rates are sufficiently far below the repo rate. and, partly, it is because some investors may choose to switch to cash if the level of interest rates becomes too low. 11 see, for example, de rezende and ristiniemi ( 2018 ). 14 if quantitative easing is to be a part of the permanent monetary policy toolbox, it would be an advantage if the instrument could be used more systematically than has been the case during the crisis. much of the development of the monetary policy analysis has focused on the importance of a systematic approach and communication – and this should also apply to new instruments, again to influence expectations in the outside world as much as possible. in addition, the central banks need to find clear strategies for how they can reduce their holdings of financial assets when economic activity improves and inflation rises, to avoid their balance sheets increasing with each recession. forward guidance to influence expectations of future interest rates ever since 2007, the riksbank has engaged in a form of forward guidance, by publishing, in each monetary policy report, its best assessment of the future development of the repo rate, inflation and the real economy. this is a matter of convincing the market of where we believe the economy and repo rate are heading. even if it is difficult to make forecasts and we have often believed that interest rates would rise faster than was actually the case, communication about the future has still been useful, particularly over the shorter horizon. we have been able to affect expectations for the following years through our communications. other central banks that have not traditionally engaged in this type of communication have, as i mentioned earlier, experimented with different forms of rough ‘ triggers ’ of various kinds. the academic background to the concept is the insight that expectations of