which should also help keep the cost of borrowing for governments low. overall, the policy actions taken in the area of fiscal policy ( by the government ), monetary policy ( by the eurosystem, of which the central bank is a part ) and macro and microprudential policy ( by the central bank and other authorities ) have helped to mitigate the amplification of the immediate shock and enabled the financial system to provide support through the crisis. future policy : some considerations households, businesses and the financial system have entered the current crisis in a more resilient position compared to the onset of the financial crisis a decade ago. looking at future policy, there are three areas that i believe deserve careful consideration : first, policy should continue to focus on supporting the productive capacity of the economy and avoiding scarring effects such as long - term unemployment. any such action by the governmentis likely to be costly in the near - term but will benefit the fiscal position over the medium term if it is effective in reducing the degree of damage to the economy ’ s productive capacity. second, the rise in the government deficit and debt ratios is both warranted and necessary and is currently affordable. but the high level of debt will leave government finances vulnerable to future shocks and it will be important for the government to provide a clear and credible return to much lower and sustainable deficit and debt positions. third, the country ’ s ability to withstand the immediate impacts of the covid - 19 shock is partly a result of policy actions over the last decade. there needs to be a continued focus on building economic resilience to future shocks, including a more sustainable debt position but also the longer term structural changes that would help to manage the challenges of 2 / 3 bis central bankers'speeches international tax reform, the longer - term implications of the uk ’ s withdrawal from the eu and climate change ( among others ). mark and i will be happy to take your questions. — — — — — — — — — — — — — — — — — — read full transcript of the hearing. 3 / 3 bis central bankers'speeches

of the crisis after lehman ’ s collapsed, and again in the early autumn of last year as the euro - area crisis intensified and growth slowed. as already noted, though, our asset purchases should drive down gilt yields and push up equity prices, other things equal. equity prices behave as expected in both qe1 and qe2, as does the gilt yield during qe2. the gilt yield was, however, broadly flat over the period of qe1. that probably reflects the influence of other factors working against our asset purchases. in particular, during 2009 market concerns about the lack of a fully credible plan to close the fiscal deficit over the medium term increased somewhat, which would have tended to push up yields. in recent months the opposite appears to have been true. market confidence in the uk government ’ s commitment to fiscal consolidation, together with heightened concerns about the fiscal positions of some euro - area sovereigns, has exerted downward pressure on gilt yields. quantifying the impact of qe requires one to abstract from these other influences on asset prices. one way of doing that is by looking at the immediate movements in asset prices around announcements of purchases. as market participants are forward - looking, one might expect the bulk of the movement associated with qe to happen when the purchases are announced rather than when they take place. and indeed that approach seems to work reasonably well for identifying the impact of qe1 on the yields on gilts, and those on close substitutes such as corporate bonds. analysis by bank staff2 suggests that long - term gilt yields were around one percentage point lower than they would otherwise have been ; that corresponds to a rise in long - term gilt prices of around 20 %. investment - grade corporate bond yields3 fell by about the same amount, while high - yield corporate bonds fell by somewhat more. this approach is less suited to analysing the impact of qe2. the deterioration in the economic situation, speeches by mpc members, and the minutes of the september policy meeting all encouraged market participants to expect a re - commencement of the purchase programme. as a result, the effects were already largely incorporated into the general level of bond prices prior to the mpc ’ s actual announcement of the new programme in october, so it becomes difficult to disentangle the effect of qe. ahead of that announcement, however, uk sovereign bond yields did fall relative to those in germany and the united states, consistent with an effect