creation of banking union and the concentration of supervisory powers in the ecb. creating banking union, setting up the single supervisory mechanism ( ssm ) and simultaneously conducting a comprehensive assessment of banks was an extraordinary undertaking and i am deeply grateful to all those who contributed to it. many among them are italian, and the banca d ’ italia was one of the key players in this process of change. the ecb also played another role – to contribute to the design of monetary union over the long term – which took concrete form in what is known as the presidents ’ report. this was also important. our decision - making process was made more transparent, too ; for the first time, we decided to publish the minutes of our meetings. bis central bankers ’ speeches i ’ d like to touch upon your famous speech in london, in which you said that you were ready to do “ whatever it takes ” to save the euro. the speech had a huge impact on the markets. to assuage my curiosity may i ask whether you expected it to have such an impact, or did you feel it was a sort of last - ditch attempt at a time when the situation was worsening rapidly? is the risk of a euro area break - up now definitively over? it ’ s clear that at the time, that speech provided information which highlighted the seriousness of the situation. since then, things have improved overall. the risks of fragmentation and redenomination have diminished considerably, if not disappeared. it should be pointed out that the euro area countries took action as well, launching a series of structural reforms and gaining credibility in fiscal policy. although much has been achieved, much still remains to be done, also in terms of the future shape of the european union. we must be able to propose a way forward to the citizens of the european union and, of the euro area. we have attempted to do this with the five presidents ’ report. i ’ m not saying that it has to be followed in its entirety, but it seems to me that this is the perspective that our leaders and our governments should also take, bearing in mind that the horizon is not cloud - free. we need only look at the newspapers to see that. however, the greek crisis has led to a breakdown of trust and caused severe damage to the euro area. i would not say that. fundamentally, trust has been rebuilt, primarily by the greek government, which today is in talks with the european institutions in an atmosphere of close collaboration

likely to trend upward given increased resource utilization and the expected continuation of economic expansion. in other words, taking a forward - looking perspective on the economic and price situation for one to two years ahead, prices were judged likely to trend upward given the fundamentals behind the economy and prices, even if the rate of change in the cpi might temporarily fall into negative territory in the short run. considering this forecast for the economy and prices in the light of the bank's " understanding of medium - to long - term price stability " referred to earlier, it was likely that sustainable growth under price stability would be achieved. this outlook is based on the assumption that private economic agents such as market participants and firms make decisions on economic activity by factoring in, to some extent, future policy changes. thus, with prospects for the economy and prices improving, gradually adjusting the level of the policy interest rate as these anticipated improvements come to pass will facilitate the smooth realization of the outlook's favorable predictions and lead in turn to a long - lasting economic expansion. second, turning to the longer horizon of the second perspective and examining the various risks most relevant in conducting monetary policy, it appeared likely that, with the prospects for the economy and prices improving, the stimulative effects of monetary policy would increase if the policy interest rate were left at its recent level. if the expectation were to take hold, in such a situation, that interest rates would remain low for a long time regardless of developments in economic activity and prices, then economic agents such as financial institutions and firms would behave accordingly. the result could well be a misallocation of resources in the long run as agents became over - extended in financial markets or poured funds and other resources into inefficient economic activities. this could then interfere with the sustained economic expansion. in the october outlook report, this was deemed one of the risk factors whose materialization, although not necessarily probable, would involve sufficient economic costs that it should be considered a " relevant " risk in conducting monetary policy. i must emphasize, however, that this risk factor involves a putative future scenario ; it does not describe a situation that has already emerged. picking up on the bank's concern with this risk factor, some market participants have seen the recent policy action as an attempt to exert direct influence on the foreign exchange rate and yen carry trade. however, considering the substance of the bank's thinking, as i have explained it earlier, makes it clear that this is not the