crisis in emerging market economies, the collapse in oil and commodity prices, and the consequences of the uk referendum. and healthier banks have provided the necessary supply of credit to maintain the pace of the recovery. the easing in credit supply conditions has been visible in both lending rates and lending volumes. since mid - 2014, bank lending rates have fallen by almost 100 basis points for both euro area households and corporates. small and medium - sized enterprises have benefitted from even larger declines. lending volumes, in turn, have posted positive growth rates for households since end - 2014, and for non - financial corporations since the last quarter of 2015, following multi - year declines. and financing conditions have improved in capital markets too, which has been followed by a pick - up in corporate bond issuance. this credit reversal has in turn supported a second benign characteristic of the recovery : the fact that it has become increasingly driven by domestic sources of growth. domestic demand has now replaced foreign demand as the main driver of growth. over the past two years, domestic demand has on average added more than a percentage point to gdp growth, supported by very accommodative financing conditions. by contrast, net exports, which were a key growth engine for most of the crisis period, have barely contributed to gdp growth since end - 2013 as the global environment has deteriorated. this shift in the composition of growth is important, from an inflation perspective, since it makes the recovery in the euro area less vulnerable to external shocks. indeed, domestic strength has helped insulate the euro area against recent global weakness, which otherwise would have dragged the recovery off track – and with it, the expected pick - up in the path of inflation. the domestic picture is also contributing to a third encouraging development : the strong rebound in employment. this has been driven by a striking reconnection between gdp and employment growth in recent years. 1 the temporary post - lehman rebound in 2010 – 11 was essentially a jobless recovery. the current recovery, however, has reduced the unemployment rate from more 2 / 4 bis central bankers'speeches than 12 % in 2013 to 10 % today. and, besides lower unemployment, the overall labour force has expanded as well in recent years, reflecting increasing labour participation rates. 2 a faster return to full employment – or what economists call the “ non - accelerating inflation rate of unemployment ” – is clearly supportive of price stability, since it heralds a tighter labour market and stronger wage pressures. and while those pressures might be somewhat

the euro area and in austria. hahn, f. r., holzl, w., kwapil, c. ( 2016 ) : the credit channel and the role of monetary policy before, during and after the global financial crisis – a micro data approach to the analysis of bank - firm relationships. wifo. eidenberger j., schmitz s. w., steiner, k. ( 2014 ) : the priorities of deleveraging in the euro area and austria and its implications for cesee. oenb financial stability report 27. july 2014. https : / / www. oenb. at / publikationen / finanzmarkt / finanzmarktstabilitaetsbericht. html seite 4 von 5 the decrease in total assets was driven by reductions in interbank assets and external assets, while funding for governments and for the real economy have increased since the outbreak of the crisis. these results go in line with an important point the oecd always makes : capital levels have increased since the crises without leading to a credit crunch. let me comment on this from a financial stability perspective. this deleveraging development is to be welcomed, as reduced leverage decreases both the potential for risks and the degree of financial interconnectedness and thus mitigates systemic risks and strengthens financial stability. hence, deleveraging takes place without constraining private sector loans. this empirical evidence is also supported by a topical eba survey, the eba risk assessment questionnaire 2016. and i quote : “ results from the risk assessment questionnaire confirm that banks plan to continue moving towards their predominantly traditional lending role in the financial sector. ” 8 further you can take out of this survey that banks will endeavor to increase lending volumes to the corporate sector, in particular smes, and to households, including both residential mortgage and consumer credit loans. the strategic goal of european banks is the further increase of corporate and household loans. to sum up, monetary policy and financial stability are complementary. a better understanding of how banks work and how they are steered ( namely via dynamic balance sheet optimization ) helps not only to implement effective micro - and macroprudential regulation but also better targeted monetary policy. banks and their environment have dramatically changed over the last years. banks are not the same as before the crisis. hence, it is essential that models and analytical tools are frequently adapted to fit the current environment. and the conclusions regarding one of