to well - defined limits and conditions. the second public consultation, made necessary by the innovations introduced during the conversion of the competitiveness decree law, is drawing to a close ; ivass will shortly issue the new regulations. however, markets able to channel large volumes of financial resources from non - bank investors to smes cannot easily be created from one day to the next. even when the regulatory questions have been settled, there will still be the problem of the information asymmetry between borrower firms and investors. those who, better than others, know or understand the present and prospective conditions of firms, first and foremost the banks that originated the loans, therefore have an essential role to play. it must not be forgotten, however, that in italy, as i mentioned earlier, the main problem regarding the functionality of the system lies in firms ’ financial fragility. the most important task of public action is therefore to push firms towards equity financing rather than additional borrowing, using every possible means, regulatory and fiscal. but bank borrowing too can be made more rational by examining its technical forms. for example, traditional overdrafts are so widespread in italy that they stand out by international standards. the fact that they do not establish a time limit for the credit actually granted creates problems for the calculation of interest and lessens their eligibility as collateral ; in order to accept such loans as collateral, the bank of italy has recently asked for the inclusion of specific contractual clauses. using finance to the advantage of growth the question of what are the determinants of economic growth in the long term has been at the centre of economic analysis since this came into being as a separate science. more than half a century ago attention was focused on productivity and technical progress as the decisive factors for growth, demoting the accumulation of physical capital, which had previously been considered the motor of capitalist growth. 9 today a new conceptual leap is being attempted, moving up the scale of causes and effects ; searching, in other words, for what determines productivity and technical progress, and finding it in the ability of a firm, an schumpeter ( 1934 ), solow ( 1956, 1957 ). there then followed numerous theoretical and empirical refinements of solow ’ s model, such as romer ( 1990 ), grossman and helpman ( 1991 ) and aghion and howitt ( 1992 ). bis central bankers ’ speeches economy, a society to “ learn ” continuously, 10 in dynamism, in end

in france ’ s excessive deficit procedure poses a problem with regard to the binding effect of the fiscal policy agreements. it also weakens other coordination procedures and it certainly provides a reason not to expand euro - area joint liability elements bis central bankers ’ speeches further, as has often been called for. liability without sufficient control undermines the stability foundation of monetary union. 4. monetary policy stance eased further by purchase programme in early 2015 ladies and gentlemen, i would now like to turn to the topic of monetary policy. inflationary pressures in the euro area have been exceedingly low, especially since the second half of 2014. the ecb governing council responded by implementing a number of measures designed to loosen still further their already expansionary monetary policy stance. public attention was particularly drawn to the expanded asset purchase programme adopted in january of this year. you don ’ t need me to tell you that i had my qualms about this decision. but the ecb governing council faces a tricky monetary policy situation – inflation rates right now are far off our medium - term target. indeed, some measures of long - term inflation expectations have even diminished distinctly in recent months. but that ’ s not just the case in the euro area ; other advanced economies that have already engaged in large - scale bond purchases also find themselves in the same boat. finding the right monetary policy response to this predicament is anything but easy. the way policymakers interpret the drivers fuelling the current low inflation rates is naturally an important consideration. my preferred response would have been to “ look through ” this spell of low interest rates, rather like other central banks in advanced economies have done. i say that because the slack price pressures in the euro area are primarily the outcome of the drop in energy prices. this decrease ought to distinctly boost growth in the euro area because its member states are net importers of oil. another point is that the available surveys suggest that long - term inflation expectations are still well anchored. and the drops in market - based expectations don ’ t automatically mean that inflation expectations have contracted. rather, they are also dictated to some extent by inflation risk and liquidity premiums. this assessment does not mean, say, that we at the bundesbank are not being consistent with our declared primary objective of safeguarding price stability. and it most certainly does not mean that we are making this objective play second fiddle to other considerations, for instance. what it does mean is that in the face of a challenging monetary policy situation, we have