is transmitted to all parts of the economy and to all jurisdictions in the pursuit of our price stability mandate. the governing council, therefore, continues to stand ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner, in line with its commitment to symmetry. let me now explain our assessment in greater detail, starting with the economic analysis. the latest economic indicators and survey results confirm a sharp contraction of the euro area economy and rapidly deteriorating labour market conditions. the coronavirus pandemic and the necessary containment measures have severely affected both the manufacturing and services sectors, taking a toll on the productive capacity of the euro area economy and on domestic demand. in the first quarter of 2020, when containment measures were only in place from midmarch in most countries, euro area real gdp decreased by 3. 8 %, quarter on quarter. information from surveys, high - frequency indicators and incoming hard data all point to a further significant contraction of real gdp in the second quarter. most recent indicators suggest some bottomingout of the downturn in may as parts of the economy gradually reopen. accordingly, euro area activity is expected to rebound in the third quarter as the containment measures are eased further, supported by favourable financing conditions, an expansionary fiscal stance and a resumption in global activity, although the overall speed and scale of the rebound remains highly uncertain. this assessment is also broadly reflected in the june 2020 eurosystem staff macroeconomic projections for the euro area. in the baseline scenario of the projections, annual real gdp is expected to fall by 8. 7 % in 2020 and to rebound by 5. 2 % in 2021 and by 3. 3 % in 2022. compared with the march 2020 ecb staff macroeconomic projections, the outlook for real gdp growth has been revised substantially downwards by 9. 5 percentage points in 2020 and revised upwards by 3. 9 percentage points in 2021 and 1. 9 percentage points in 2022. given the exceptional uncertainty currently surrounding the outlook, the projections also include two alternative scenarios, which we will publish on our website following this press conference. in general, the extent of the contraction and the recovery will depend crucially on the duration and the effectiveness of the containment measures, the success of policies to mitigate the adverse impact on incomes and employment, and the extent to which supply capacity and domestic demand are permanently affected. overall, the governing council sees the balance of risks around the baseline projection to the downside. according

bandid nijathaworn : risk management and pillar ii implementation opening address by dr bandid nijathaworn, deputy governor of the bank of thailand, at the fsi - seanza regional seminar on the implementation of the supervisory review process ( pillar ii ) of basel ii, bangkok, 21 - 24 april 2009. * * * distinguished speakers ; and colleagues from seanza central banks and regulatory authorities, let me begin by extending a warm welcome to all of you to bangkok, and on behalf of seanza members, i would like to express our appreciation to all the speakers, as well as the fsi, for their contributions to make this fsi - seanza regional seminar on the implementation of the supervisory review process possible. this is all the more so as this seminar had to be rescheduled from last year, and in this regard, let me express our commitment that the bank of thailand stands ready to facilitate you and ensure that your experience here will be a fruitful and enjoyable one. ladies and gentlemen, the current global financial crisis underscores the need to strengthen risk management and risk - based supervision, so that we can deal more effectively with the increased complexity arising from both financial product innovation and increased interconnectedness between financial institutions. as for the current crisis, while many causes have been identified, what has become very clear is that financial institutions, capitals were not adequate given their risks, and this had allowed over - leveraging by financial institutions as well as by their customers, leading to over - indebtedness and asset price bubbles. the issue, therefore, underscores the inadequate risk management, covering the entire process : from the lack of proper risk measurement, especially with regard to complex product, as well as liquidity risk, to inadequate risk management and control, and to micro - prudential risk - based supervision. in addition, there is now greater attention being paid to the importance of macroprudential approach, in recognition of the risk from procyclicality and interconnectedness of institutions, especially the large and highly complex financial institutions. also, greater recognition is given to the problem of the unregulated shadow banking sector, like the hedge funds, which are also key in systemic risk process. all these issues pose a major policy challenge, as indeed the various working groups and committees of the bis are now working on the guidelines, and on the key issues such as accounting, valuations, procyclicality, and