authorities, and also with esrb and eba. the ecb will detail the design and strategy of the assessment exercise, monitor its execution, perform quality assurance as well as collect and consolidate the results and finalise and disclose the overall assessment. national supervisors execute the exercise at the national level, benefitting from local knowledge, but following common data requirements and methodology. the comprehensive assessment is indeed comprehensive. first we do a risk assessment addressing key risks in the banks ’ balance sheets, including liquidity, leverage and funding. after that an asset quality review is carried out examining banks ’ balance sheets based on information at the end of 2013. and finally, a stress test, done in collaboration with the eba, complements the asset quality review by providing a forward - looking view of banks ’ riskabsorption capacity under stress. the structure of the comprehensive assessment also clarifies the frequently asked question, how this assessment differs from previously conducted eu level stress tests? the key differences to my mind are as follows : • banks ’ risks and asset quality are assessed in a comprehensive manner at the banking union level. assessments are made applying common definitions, abolishing - or at least showing explicitly – any diverging national interpretations. bis central bankers ’ speeches • sufficient corrective measures can be guaranteed as the ecb in its supervisory role will have all the necessary supervisory powers. • quality of assessments is ensured not only by the ecb ’ s strict procedure for ongoing quality assurance, but also by the involvement of third party evaluators. the results of the assessment will be published in a single disclosure, including all three parts of the exercise. the results of the comprehensive assessment will be followed by corrective measures where necessary. such measures could include, for instance, recapitalisation, also through profit retention, equity issuance, re - orientation of funding sources, asset separation and sales. other preparatory work for ssm alongside the comprehensive assessment, a lot of other preparatory work is going on. the ssm supervisory model is constructed so that the decision - making on supervisory matters and other related procedures are kept separate from the monetary policy. as regards supervisory matters, the new supervisory board will have a predominant role ; in most of the cases, it will be the final decision maker. at the practical level in the supervisory model, the joint supervisory teams are key actors. such teams are created for each significant bank or banking group that will be directly supervised by the ecb. joint supervisory teams are responsible for

was perceived as asymmetric, effectively setting a 2 % ceiling for inflation. this asymmetry very likely contributed to lowering inflation expectations and thereby inflation itself. the new symmetric inflation target is expected to influence long - term inflation expectations and to anchor them more solidly to the 2 % inflation target. when we published our new symmetric inflation target in july 2021, the operating environment for monetary policy was changing dramatically. slide 5. inflation is converging towards the ecb's 2 % target the supply shocks, caused first by the pandemic and then by russia's unjustified and brutal war in ukraine, pushed the euro area inflation rate above 2. 5 % for the first time in nine years by the fall of 2021, and then all the way up to 10. 6 % in october 2022. thanks to the normalisation of energy prices and the determined but very consistent monetary tightening, euro area hicp inflation is now at 2. 4 %. it is expected to decline further, reaching our inflation target next year. when i addressed this forum a year and a half ago, in october 2022, the uncertainty related to energy supply in europe was extreme. rationing of energy supplies was widely discussed. so were the various risk scenarios, some containing severe stagflationary tendencies. at the time, energy was the key driver of euro area inflation, while moderate wage inflation was acting as an anchor. subsequently, europe reacted decisively and cut the energy crisis short. today, wages have replaced energy as the main inflation driver – but wage growth is now moderating and inflation declining. due to the energy price assumptions, our inflation forecasts overestimated actual inflation in the fourth quarter last year. for this year, our assumptions and inflation forecasts have been more accurate, although in march we did revise down our inflation forecast for this year to 2. 3 %. in september last year, our 2024 inflation forecast was at 3. 2 %, so we have in fact been approaching our target faster than we had expected at the time we raised the policy rate to the current level. however, disinflation is more than just a story of the reversal in energy price movements. monetary policy has played an important role in dampening demand since the rate hiking cycle started in july 2022. monetary restraint is continuing to reduce inflation and impact the real economy strongly, affecting the growth outlook, particularly for this year. in march, we also revised down our growth