households and firms. otherwise, increasing fiscal interventions could put upward pressure on market interest rates and crowd out private investors, with a detrimental effect on private demand. second, monetary policy has to continue supporting the banking sector to secure policy transmission and prevent adverse feedback loops from emerging. firms are still dependent on new flows of credit. and those that have borrowed heavily so far need certainty that refinancing will remain available on attractive terms in order to avoid excessive deleveraging. in other words, when thinking about favourable financing conditions, what matters is not only the level of financing conditions but the duration of policy support, too. all sectors of the economy need to have confidence that financing conditions will remain exceptionally favourable for as long as needed – especially as the economic impact of the pandemic will now extend well into next year. currently, all conditions are in place for both the public and private sectors to take the necessary measures. the gdp - weighted sovereign yield curve is in negative territory up to the ten - year maturity. nearly all euro area countries have negative yields up to the five - year maturity. bank lending rates are close to their historic lows : around 1. 5 % for corporates and 1. 4 % for mortgages. and our forward guidance on our asset purchase programmes and interest rates provides clarity on the future path of interest rates. but it is important to ensure that financing conditions remain favourable. this is why the governing council announced last month that we will recalibrate our instruments, as appropriate, to respond to the unfolding situation. the council is unanimous in its commitment to ensure that financing conditions remain favourable to support economic activity and counteract the negative impact of the pandemic on the projected inflation path. in the weeks to come we will have more information on which to base our decision about this recalibration, including more evidence on the success of the new lockdown measures in containing the virus, a new set of macroeconomic projections and more clarity on fiscal plans and the prospects for vaccine roll - outs. while all options are on the table, the pepp and tltros have proven their effectiveness in the current environment and can be dynamically adjusted to react to how the pandemic evolves. they are therefore likely to remain the main tools for adjusting our monetary policy. looking beyond our next policy meeting, our ongoing strategy review gives us an opportunity to reflect on the best combination of tools to deliver financing conditions at the appropriate level, how those tools should be implemented

overcoming the crisis. more than ever before, macroeconomic, supervisory and regulatory authorities have dovetailed and made each other ’ s efforts more powerful. policy responses to the pandemic what has this meant for monetary policy? there are two main ways in which we have adapted the ecb ’ s policy to the pandemic : via the design of our tools and via the transmission of our monetary policy. first of all, we have responded to the unique features of the recession by designing a set of tools specifically tailored to the nature of the shock, including recalibrating our targeted longer - term refinancing operations ( tltros ), expanding eligible collateral, and launching a new €1. 35 trillion pandemic emergency purchase programme ( pepp ). the pepp in particular has the dual function of stabilising financial markets and contributing to easing the overall monetary policy stance, thereby helping to offset the downward impact of the pandemic on the projected path of inflation. the stabilisation function of the pepp is ensured by its flexibility, which is crucial given the unpredictable course of the pandemic and its uneven impact across economies. in this context, the pepp ’ s flexibility allows us to react in a targeted way and counter fragmentation risks. this was key in reversing the tightening of financing conditions that we saw in the early days of the crisis. in parallel, the stance function of the pepp gives us the scope to counter the pandemic - driven shock to the path of inflation – a path that has also been greatly influenced by the specific characteristics of this recession. not only has inflation fallen into negative territory, but we have already seen services inflation, which is normally the more stable part of the price index, drop to historic lows. but the pepp, together with the other measures we have taken this year, has provided crucial support to the inflation path and prevented a much larger disinflationary shock. 4 and its impact has been amplified by interactions with other policies. for instance, the combined effect of the ecb ’ s monetary and supervisory measures is estimated to have saved more than one million jobs. 5 2 / 6 bis central bankers'speeches at the same time, the nature of the pandemic also affects the transmission of monetary policy. normally, an easing of financing conditions boosts demand by encouraging firms to borrow and invest, and households to bring forward future income and consume more. in turbulent times, monetary policy