in banking, where they are very rare ( notwithstanding unicredit - hvb ). the aim in the end is to create jobs. unemployment at this level is unacceptable. one in four young people in europe are out of a job. as structural reforms take time, we need to resort to active labour market policies, like vocational training. otherwise, we risk a lost generation. bis central bankers ’ speeches the little growth there is comes from exports. german and italian companies meeting in bolzano this week raised the question of the strength of the euro. our answer does not change. we don ’ t have an explicit exchange rate target. the exchange rate is factored into our inflation and growth forecasts. but is it too high, is it overvalued, does it worry you? a in nominal terms and in real effective terms, which is more important, it is within the band we have seen for the last ten years. i don ’ t have any specific worry on the exchange rate. it only concerns me as it factors into our inflation forecast. you are directly involved in the negotiations on the banking union. single supervision was agreed, but on single resolution there are still wide differences. time is running short, because of the end of the legislative term of the european parliament in the middle of next year and the uncertainty in germany about the next government coalition, which will delay decisions. we want a banking union with all its elements, which includes a single resolution mechanism with its three components : a european resolution regime, a european resolution fund and a european resolution authority. and we want it in place close to the time single supervision starts in november next year. it is ambitious but doable. the european parliament will stop working in april. that means finishing the law - making beforehand. that is why, from a european perspective, it so important that a major member state will form a new government soon. then we can have a european council position that will pave the way for legislation. this is in my view the biggest task ahead of us in the next few months. it is of the utmost importance, because it will provide a key contribution to reducing the fragmentation in the euro area. the german government has said that treaty revision is needed for a single resolution authority and it doesn ’ t agree on the use of the european stability mechanism for the recapitalisation of banks. we want a joint regime, a joint fund and a joint agency. the ecb lawyers agree with the

credit risks involved. on the other hand, the improvement in economic activities has not stimulated corporate demand for external funds, since firms ’ cash flow is at a high level in parallel with recovery in profits. moreover, firms continue to reduce their debts as part of their balance - sheet restructuring measures. as a result, credit demand in the private sector has continued to be basically stagnant. in view of this, the underlying tone of private banks ’ lending remains sluggish. recently, however, the expansion in the year - to - year decline seems to be ceasing. issuance of corporate bonds and cps has been steady. money stock ( m2 + cds ) grew faster in september compared with the previous month on a year - onyear basis. recently, funding costs for firms are somewhat increasing, due to the rise in money market rates after the termination of the zero interest rate policy. in this financial environment, there seem to be no substantial changes in the lending attitude of financial institutions and easing of corporate financing conditions.