the state ( repayable advances ) and two schemes implemented by the hellenic development bank – a guarantee scheme and a co - financed interest subsidy scheme for new corporate loans. these are expected to reach an overall loan volume of about €13 billion, or 7. 7 % of gdp. they come on top of the broader fiscal package in response to the pandemic, including interest subsidies for existing performing loans, bonds and bank overdrafts, reductions and deferrals of tax and social contributions, and labour market support measures. so far, the ecb ’ s policy measures and the relevant greek policies have supported bank lending to corporates, which has increased substantially, while credit standards have remained broadly stable. a large net flow of loans – above €1 billion – was registered in july, supported in particular by the guarantee scheme of the hellenic development bank. at the same time, greek small and medium - sized enterprises continue to have serious concerns about their lack of access to financing. their financing gap remains high, despite the increased availability of bank loans and the decline in interest rates. in order to underpin the recovery, policy support remains necessary to safeguard the continued supply of credit. looking ahead, it is essential to complete the financial sector reforms needed to support the process of npl reduction and guarantee an adequate supply of credit during the recovery. these reforms include improving the e - auctions framework, revising the insolvency framework, reducing the backlog of pending personal insolvency cases before the courts, and clearing called state guarantees on bank loans. the funding provided by next generation eu is an opportunity for greece 2 / 3 bis central bankers'speeches the funding from next generation eu creates an extraordinary opportunity. for the first time in history, the european union will issue common debt to counter a common shock. this will bring fiscal policy more in tune with monetary policy at the european level, and may represent an important step for european integration : we borrow together to recover from the crisis and to invest in our future. all eu countries will benefit from this common response. but to be effective, european measures require careful planning and decisive action at the national level. in time, the need to buffer the immediate impact of the pandemic will be replaced by the need for investment and reform to support a sustainable recovery. as the national support measures are phased out, a well - planned and coordinated approach will be necessary if we want to avoid cliff effects. policies will have to find the right

link or no link? ” bis working papers, no. 346, bank for international settlements, may. bis central bankers ’ speeches incentive for both borrowers and lenders to take more risk. the consequent build - up in leverage leads to financial instability. 4 • jeremy stein puts it succinctly : “ monetary policy is fundamentally in the business of altering risk premiums ”. third, since monetary policy affects risk - taking and the credit cycle, which in turn affect financial stability, monetary policy should therefore take account of financial stability. • jeremy stein argues that since economic agents will find ways to circumvent regulatory measures to control risk - taking, it is better to use monetary policy to “ get in all of the cracks ”. • conceptually, this amounts to augmenting the taylor rule with an additional term to capture deviations in financial variables from their equilibrium values. • monetary policy has a role in “ leaning against the wind ” of financial stability risks. while the first two propositions are gaining credence and traction among policymakers, the third proposition is heavily contested. • the fact that monetary policy has an impact on financial stability does not necessarily mean that it should directly seek to achieve it. monetary policy and financial stability : uncomfortable bedfellows? let me offer two reasons why operationalising a financial stability role for monetary policy may be difficult. leaning against winds from opposite directions? first, conflicts could arise between the price stability and financial stability objectives. • financial cycles are typically longer than business cycles, and the two cycles may diverge. • the interest rate appropriate for price stability may not be consistent with financial stability. • how does one lean at the same time against two winds blowing from opposite directions? one reason why the winds might blow from opposite directions, especially for emerging economies, is the role played by international liquidity and capital flows. • philip lane has detailed the strong inter - linkages between global liquidity conditions, international debt flows, and domestic credit conditions. • maurice obstfeld argues that because of the impact of financial globalisation, monetary policy carries a big burden trying to achieve both financial stability and macroeconomic stability. the experience of emerging asia during 2010 – 2013 is illustrative. • asian economies were broadly in full employment with low inflation and some downside risks to growth from the eurozone crisis. borio, c and zhu, h ( 2008 ), “ capital regulation, risk - taking and monetary policy : a missing