appetite has benefited the hedge fund sector. by the end of october 2009, most hedge fund investment strategies have already recouped a substantial part, or even all, of the losses they suffered in 2008. cumulative average year - to - date investment returns at the end of october 2009 of all hedge fund investment strategies had almost all signs opposite to those reported for the whole of 2008 ( see chart 3 ). at the same time, after significant investor outflows in earlier quarters, preliminary estimates for the third quarter of 2009 suggest that the second quarter of 2009 may have marked the end of sectorwide investor outflows. iii. risks in the euro area non - financial sectors let me now focus on risks and vulnerabilities that we have identified in the non - financial sectors of the euro area economy. despite the considerable heterogeneity at the country level, the overall macroeconomic environment in the euro area has improved over the past six months. the decline in euro area economic activity has been sharp by historical standards since the third quarter of last year, but quarterly real gdp growth has recently turned positive ( see chart 4 ). in addition, the latest eurosystem staff macroeconomic projections show a gradual recovery in 2010, although the road ahead is likely to be uneven. among the risks stemming from the euro area non - financial sectors, i will highlight the main vulnerabilities in the corporate sector, specific fragilities in the commercial property market, and certain risks associated with the household sector. over the past six months, corporate profitability has remained very low and leverage ratios have generally increased, intensifying the balance sheet vulnerabilities of the non - financial corporate sector. in addition, banks have continued to apply conservative lending standards, albeit at a moderating degree. improvements in financial market conditions have allowed larger firms to partly substitute bank loans with market - based debt or equity. looking forward over the next few months, the overall balance sheet conditions are expected to remain challenging, as firms ’ access to external finance is not likely to improve significantly in the coming months, while profitability is likely to remain low. low profitability and high leverage are putting a severe strain on firms, making them less resilient to adverse shocks. as a consequence, some measures of corporate credit risk, such as unconditional expected default frequencies, remain high for most industries although they had declined recently for most sectors. ( see chart 5 ). conditions in the euro area commercial property markets

what i mentioned earlier, customers must be able to easily initiate an instant payment from an online shopping environment and the merchant must instantly receive confirmation that the payment has been executed. the revised payment services directive ( psd2 ) provides a stable legislative framework for such services and aims to foster innovation and competition in this field. the erpb, taking the revised psd2 and the close - to - final regulatory technical standards as a basis, has supported the industry in its endeavours to reach agreement on the necessary technical, operational and business elements to ensure the pan - european provision of innovative and competitive payment initiation services. this work is well under way and will be concluded by june this year. in parallel, the european commission has encouraged a group of market actors to evaluate application programming interface ( api ) technical specifications to ensure that they will meet market needs and will be fit for purpose when accessing customer accounts to initiate payments. security the psd2 provides many opportunities for innovative services, including, but not limited to, ecommerce payment solutions. such solutions require standardised access to accounts, but also security throughout the payment chain. the psd2 regulatory technical standards on strong customer authentication and common and secure communication strike a good balance between the needs of consumers, third - party providers and banks. they will probably not be applicable until september 2019 at the earliest. since the main provisions of the psd2 have been in effect since last month, i call on payment service providers to fulfil the requirements of the regulatory technical standards, even if they are not yet legally required to do so, during the transition period until these standards enter into force. it is in their own interests to do so, as this will guarantee the high security levels that are necessary to retain public trust in the payment system and payment services. instant payments versus virtual currencies smart, pan - european instant payment solutions meet the needs of end - users in the digital age, being fast and easy to use as well as safe and reliable. the sct inst scheme and the underlying market infrastructure are subject to eurosystem oversight, and settlement takes place in central bank money. by contrast, so - called virtual currency schemes such as bitcoin, which have been 2 / 3 bis central bankers'speeches touted by some as the payment method of the future, cannot achieve that. first, bitcoin is not a currency but simply a speculative digital asset. it tends to be processed inefficiently and