s mandate, by contrast, is inscribed in a document with a constitutional status : the treaty. a constitution rests on those shared values deeply felt by citizens ; that is why constitutions are not, nor should be, subject to periodic scrutiny by voters. to fulfil our mandate, we enjoy a large measure of independence in how we formulate our monetary policy. but that freedom has precise limits. we cannot use instruments prohibited by the treaty to achieve our objectives. for example, we are prohibited from engaging in monetary financing of governments. neither are we at liberty to redefine those objectives : abandoning the pursuit of our mandate, for instance, is simply not an option. and neither can we engage in behaviour that would de facto redefine the provisions of the treaty, such as a country ’ s membership, or not, of the euro area. in other words, our mandate is defined by the treaty. in recent years, when pursuing the objectives in our mandate, we have been confronted with extremely demanding challenges which have called for unprecedented monetary policy measures in terms of nature, scale and number. we have had to ward off risks that were corroding the integrity of money both over time – price stability – and across space – within the euro area – especially when doubts arose about some countries ’ membership of the area. in each instance we have responded in full compliance with our mandate, within the limits set by the treaty. to illustrate this point, i would like to consider two recent examples : the launch of the ecb ’ s asset purchase programme ( app ) in september last year and the eurosystem ’ s provision of emergency liquidity assistance ( ela ) to greek banks in recent months. the asset purchase programme in the early phase of the crisis, inflation on the whole remained well anchored to our objective. having recovered after the effects of the lehman brothers shock, consumer price inflation averaged 1. 6 % from september 2008 until the end of 2011. afterwards, against a backdrop of persistent macroeconomic weakness, inflation began a prolonged downward drift, consistently undershooting our staff projections. from the start of 2014, it became increasingly clear that without our comprehensive response, medium - term price stability was at risk. initially, we judged the main barrier to higher inflation to be impairments in the monetary transmission process that were preventing our policy from gaining traction in the economy. to remove those impairments, our policy response – launched in the summer of last year – bis central bankers ’ speeches focused above

account, with the exception of spain. last year, spain still had a primary deficit of 0. 5 %, but this year it is very likely that they will also make a surplus. in some cases, this adjustment in the primary balance was in the double - digits, which is huge. our analysis, and the imf ’ s, shows that the positive current accounts that all of these peripheral countries have built are the result of a structural adjustment. this is not about lower imports and weaker demand ; it is about the improved performance of exports and structural adjustments. and that ’ s very important. second, in terms of the banking sector, the capital level of banks everywhere has increased and the average common equity ratio of banks here is 14. 3 %. there is no bank below 11 % in the euro area. that also represents a huge reduction of risk. then, third, there is the brrd [ bank recovery and resolution directive ], which rules that if there will be any collapse of banks, then no bailouts by the public sector can be engineered – at least before there is a private bail - in of 8 % of the total assets of the bank. so that ’ s a big risk reduction for national government budgets and for taxpayers. banks are also building up their bail - in - able securities. and the fact that the brrd has to be applied before any loan by the european stability mechanism is made to a bank means that, very likely, there will not be any direct recapitalisation on a european level. so there is a long list of things, not to mention the reduction in non - performing loans. npls have been subject to intense action by supervisors. the average amount of npls compared with the total amount of credit came down to 4. 8 % last year, from slightly above 8 % in 2013. of course, there are around 30 banks that still have higher – in some cases, much higher – npl ratios, but the targets are there. and the banks beat their targets to reduce their bad loans last year. so it ’ s working, it ’ s going in the right direction. in a nutshell, enough risk reduction has been achieved to justify introducing elements of risksharing in the banking union project. and that would be a european deposit insurance scheme? that would be edis and the backstop for the single resolution fund, which, in practice, is not so important. how do you think this taking on of responsibility for