prospects led to a strong increase in the demand for mortgages. in line with this, mortgage lending picked up slightly, growing at an annual rate of 0. 6 per cent. conclusion the governing council today decided to lower the three key ecb interest rates by 25 basis points. in particular, the decision to lower the deposit facility rate – the rate through which we steer the monetary policy stance – is based on our updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission. we are determined to ensure that inflation returns to our two per cent medium - term target in a timely manner. we will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim. we will continue to follow a data - dependent and meeting - by - meeting approach to determining the appropriate level and duration of restriction. in particular, our interest rate decisions will be based on our assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission. we are not pre - committing to a particular rate path. 3 / 4 bis - central bankers'speeches in any case, we stand ready to adjust all of our instruments within our mandate to ensure that inflation returns to our medium - term target and to preserve the smooth functioning of monetary policy transmission. we are now ready to take your questions. 4 / 4 bis - central bankers'speeches

- bank basis, as well as the level of bank preparedness to operate under basel ii. once an institution conducts a successful parallel run, the relevant primary federal supervisor would then confirm the bank's readiness and give permission for the institution to move to the first initial phase of adoption, into the initial floor period. it is only after an institution has operated to the primary supervisor's satisfaction in the parallel run and each of the three years of floors that it would be allowed to have its minimum regulatory capital requirements determined by basel ii with no floors. during u. s. implementation of basel ii, if at any stage in the process we see something that concerns the banking agencies, we will reassess and propose amendments to relevant parts of the framework. the agencies have already decided to embed in the planned timeline the possibility for a later revision to the initial basel ii rule ( before the floors are removed ), since it is expected that new information provided in the parallel run and floor years might point to a need for adjustments to that initial rule. this is entirely consistent with the path we have taken in the past regarding basel i, to which there have been more than twenty - five revisions since 1989. the federal reserve considers all of the planned safeguards and checks and balances to be sufficient for basel ii to be implemented in the united states effectively, and with no negative impact on safety and soundness or the functioning of banking markets. proposed amendments to basel i as i noted, the basel ii proposal is not the only minimum regulatory capital proposal being contemplated by the u. s. banking agencies. we have issued an anpr for amendments to basel i that is another important initiative in our efforts to update regulatory capital rules. the regulatory capital rules to be amended by the anpr would apply to thousands of banking institutions in the united states, while the basel ii proposal would likely only apply to ten to twenty at inception. the agencies are focusing considerable attention on the potential interplay between the proposed basel ii rules and the proposed basel i amendments in order to ensure that the goals for each are achieved. the federal reserve's statement pertaining to the release of the anpr highlighted that the revisions are intended to align risk - based capital requirements more closely with the risk inherent in various exposures. the anpr relates, in part, to some long - standing issues in our current capital rules that have been identified ( such as requiring capital for short - term commitments ). we also noted that the amended basel i