gertrude tumpel - gugerell : building and preserving trust – challenges for the financial community speech by ms gertrude tumpel - gugerell, member of the executive board of the european central bank, at a meeting of the international chamber of commerce commission on banking technique and practice, athens, 15 - 16 april 2008. * * * introduction a dinner speech should fulfil two criteria : it should not spoil the mood of the guests, and it should not be too long. given that i will be talking about financial sector developments, this will be a very difficult task, but i will try my best. i am delighted to be able to share my thoughts with you tonight and would like to thank the organisers for inviting me to do so. the international chamber of commerce has a long history of establishing international standards. i very much welcome this setting of standards, as it is the motor of further financial integration, efficient banking and sound management practices. however, in the light of the ongoing financial market turmoil, more rigorous thinking about banks ’ risk taking and risk mitigation could be on the agenda for the years to come. in my speech tonight, i will talk from a euro area and ecb perspective. first, i will elaborate on the economic outlook for the euro area. second, i will explain the clear distinction that we at the ecb, as well as many other central banks, make between our decisions on the level of the key interest rates and the provision of liquidity to banks. taking a longer - term perspective, it is clear that both the private sector and the authorities worldwide will have to undergo fundamental changes in their modes of operation. third, i will therefore give you my view on the challenges facing the private sector and then describe the follow - up responses of international institutions and authorities. i will close with a few words on the importance of continued progress in furthering financial integration in europe. i euro area economic outlook, monetary policy stance, and the ecb ’ s market operations the financial turmoil has affected the global economy. so far, however, the effect on the euro area economy appears to have been limited, the fundamentals of the euro area economy are sound. the latest information on economic activity confirms the picture of moderate but ongoing growth. looking ahead, both domestic and foreign demand are expected to support real gdp growth in 2008. although growth in the world economy is moderating, it is expected to remain resilient, benefiting in particular from strong growth

october. the recovery in the growth of loans to the private sector observed since the beginning of 2014 is proceeding. the annual growth rate of loans to non - financial corporations increased to 3. 1 % in november 2017, after 2. 9 % in october, while the annual growth rate of loans to households stood at 2. 8 % in november, compared with 2. 7 % in october. the euro area bank lending survey for the fourth quarter of 2017 indicates that loan growth continues to be supported by increasing demand and a further easing in overall lending conditions. the pass - through of the monetary policy measures put in place since june 2014 continues to significantly support borrowing conditions for firms and households, access to financing ‒ notably for small and medium - sized enterprises ‒ and credit flows across the euro area. to sum up, a cross - check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed the need for an ample degree of monetary accommodation to secure a sustained return of inflation rates towards levels that are below, but close to, 2 %. in order to reap the full benefits from our monetary policy measures, other policy areas must contribute decisively to strengthening the longer - term growth potential and reducing vulnerabilities. the implementation of structural reforms in euro area countries needs to be substantially stepped up to increase resilience, reduce structural unemployment and boost euro area productivity and growth potential. regarding fiscal policies, the increasingly solid and broad - based expansion strengthens the case for rebuilding fiscal buffers. this is particularly important in countries where government debt remains high. all countries would benefit from intensifying efforts towards achieving a more growth - friendly composition of public finances. a full, transparent and consistent implementation of the stability and growth pact and of the macroeconomic imbalance procedure over time and across countries remains essential to increase the resilience of the euro area economy. strengthening economic and monetary union remains a priority. the governing council welcomes the ongoing discussions on completing the banking union and the capital markets union, and on further deepening economic and monetary union. we are now at your disposal for questions. 2 / 2 bis central bankers'speeches