euro - area countries have made in adjusting their economies. but we should not get ahead of ourselves. take a look at spain which is a country of interest to you in texas given its relevance for mexico. spain is in recession and has an unemployment rate in excess of 25 %. yet, it is able to tap the bond markets in the 10 - year maturity range at 3. 29 % – not too much above the rate that the us has to pay. this is certainly a situation in which one could start looking for signs of exuberance. however, due to different starting points some countries are naturally more advanced in their adjustment process than others. especially in greece further efforts are necessary to manage the turnaround. against this backdrop, it is a positive sign that the country has made a successful return to the bond markets. greece raised €3 billion with a five - year bond that was oversubscribed nearly eight - fold, and had to offer less than 5 % interest. nevertheless, there are certainly concerns that this success might tempt policy makers to become complacent – not only in greece but in all the crisis - countries. this must not be allowed to happen. 3. the role of monetary policy now, what is the role of monetary policy in this process? monetary policy certainly helped to prevent the crisis from escalating. still, there is one thing we should be clear about : monetary policy cannot solve the underlying causes of the crisis. nevertheless, some observers propose an even more expansionary monetary policy. they are worried about the risk of deflation in the euro area. it is certainly true that current inflation rates are rather low. in march, they dropped again to reach a surprisingly low level. nevertheless, we do not conduct monetary policy by consulting the rear - view mirror but by looking ahead. and looking ahead, the risk of deflation seems to be limited. and on this issue, the bundesbank and the ecb agree. the argument rests on three pillars : bis central bankers ’ speeches • first, around two - thirds of the drop in inflation is due to falling prices for energy and food. these are exogenous factors and their effects are likely to be temporary. • second, low inflation rates in the euro area are partly the result of necessary adjustments in the crisis - hit countries. these should also be one - off effects. • third, there are no signs of a self - enforcing downward spiral of prices and wages. long - term inflation

, resolution costs will have to be borne first by shareholders and creditors. after that, a bank - financed resolution fund will come into play, and only as a last resort are public funds to be used and the taxpayer made to pay. and there is even more to do before the banking union starts. one of the biggest preparatory steps is undoubtedly the comprehensive assessment of those banks which will fall under european supervision. this comprehensive assessment consists of two elements : a backward - looking asset quality review and a forward - looking stress test. the objective of the asset quality review is to uncover legacy assets in banks ’ balance sheets that were accumulated while the banks were under national supervision. the objective of the stress test is to assess how resilient banks are to stress scenarios. any capital shortfalls revealed by the comprehensive assessment have to be rectified before the banking union starts. ideally, this would primarily involve private funds. if private funds should not be available and the bank has a sustainable business model, the respective government could step in. ultimately, it is a question of who is responsible for past failings in banking supervision – and that is the individual member states. the comprehensive assessment will allow the banking union to start with a clean slate. at the same time, it will support the necessary deleveraging of european banks. balance sheets will eventually be “ cleaned up ” and any doubts regarding their quality will be removed. this will improve banks ’ capacity to lend to the real economy and thus support economic growth. against this backdrop, it is crucial that the comprehensive assessment is conducted in a tough and thorough manner. nevertheless, to ensure that the real economy is properly financed we might have to consider additional options. an important step would be to revive the market for securitisation. looking at europe, this is of particular importance as corporate funding in europe is much more dependent on bank credit than in the us. meanwhile, european asset backed securities ( abs ) had a much better track - record during the crisis than their us counterparts : according to a recent study by the ecb and the bank of england, the default rate for european abs from mid - 2007 to the third quarter of 2013 was 1. 5 %. this compares to 18. 4 % in the us. it is crucial to make securitised products attractive to investors without exerting negative effects on financial stability. 6. conclusion ladies and gentlemen, i have covered a lot of ground in my speech today. nonetheless, the central message is straightforward