sector. favourable financing conditions provide the pepp with bearings to counteract the pandemic - induced downward pressure on projected inflation. to this end, the ecb governing council considers the financing conditions for all non - financial sectors – that is, for enterprises, households and the public sector. it also observes various stages of the transmission process of monetary policy to the economy. as well as monitoring various indicators, it ’ s also important to analyse the reasons that led to a change in those indicators, because it ’ s not a matter of using monetary policy to cement a particular interest rate level. the aim is merely to prevent a premature deterioration in the funding environment, which would drag on the economic recovery and thus on the inflation outlook as well. considering what might be behind the change in the indicators is particularly relevant, not least in 3 / 5 bis central bankers'speeches the current situation. you see, nominal yields on government bonds are up in the year to date. to a large extent, though, that ’ s due to inflation expectations, which are moving towards our target. higher yields on government bonds, then, are also a sign that our monetary policy is working. furthermore, better economic prospects usually also go hand in hand with higher real interest rates. financing conditions therefore always have to be assessed in combination with economic developments. and it is indeed the case that financing conditions are still favourable, all things considered. advances on the vaccination front mean that the economy in the euro area, too, is now probably making its way out of the crisis. this has implications for the pepp, because the programme is clearly tied to the pandemic and must come to an end once the emergency situation has been overcome – that has been a hugely important point for me ever since the pepp was introduced. at that time, in march 2020, ecb president christine lagarde summed up the contingent nature of the programme when she tweeted : “ extraordinary times require extraordinary action ”. 8 but when is the emergency situation over as far as monetary policy is concerned? ultimately, it ’ s up to the ecb governing council to answer that key question. i see two preconditions for discontinuing net purchases under the pepp altogether. one is the expiry of all key measures introduced to contain the pandemic which restrict economic life. that, you see, would be a sign that enough has been done to suppress the pandemic or to overcome the

problem, no legislative changes are currently being envisaged, because the legal system is flexible enough to cope with these problems. ladies and gentlemen, the turning of the clock at midnight on december 31, 1999 cannot be postponed - as you all know. time is a scarce asset with regard to the necessary preparations. as all credit institutions are depending on each other to be sufficiently prepared, the issue is hardly a factor of competition. on the contrary, an exchange of experience and information is crucial in order to enhance the efficiency of the changeover work. therefore, the federal banking supervisory office and the deutsche bundesbank have been playing a proactive role in coordinating the efforts across the financial institutions : at their instigation, the central credit committee ( zka ) established a forum comprising several banking associations for exchanging experience on the year 2000 problem at the expert level. the federal banking supervisory office and the deutsche bundesbank are involved in the forum ’ s work. supporting the banking industry in its efforts to solve the y2k problem is an ongoing process that will continue until the crossover takes place. nevertheless, i must reiterate that the ultimate responsibility lies with the management of the individual institutions themselves. this is why handling the year 2000 problem responsibly is a criterion for the federal banking supervisory office when assessing whether or not banking business is being conducted properly. iv i could go on and on about the supervisory aspects of the y2k problem. however, a luncheon speech does not seem to be the appropriate setting to go into too much detail. furthermore, when i look at the impressive programme of this conference, it seems to me that all the important elements of this topic will be covered by this morning ’ s and afternoon ’ s panels. however, looking at a lunch as a social event, one aspect of the y2k problem comes to my mind that is not covered by today ’ s programme and that might be worth bringing to your attention - if nothing else, at least as a potential problem in the course of the century date change that deserves thought. let me call it the social aspect of the y2k problem. new year ’ s eve 1999 / 2000 will be a social event of major proportions, according to some people even an event of biblical significance. millions of people will drive either to one of many organised new year ’ s parties or to pay a visit to relatives or friends in order to celebrate the new millennium. are you aware of the fact that there are about