in broader credit conditions since the introduction of our new non - standard measures. the survey, addressed to the senior loan officers of a representative sample of euro area banks, provides information on financing conditions in euro area credit markets and on banks ’ lending policies. the left - hand chart in figure 4 shows that banks have consistently eased their credit standards for loans to non - financial corporations over the past year. the easing of credit standards stems, notably, from the lower cost of funds and balance sheet constraints, as well as from greater competition among banks. both developments were clearly objectives of our measures, in particular of the tltros. the right - hand chart in figure 4 shows net credit demand conditions and their contributing factors. easier access to credit has been coupled with a consistent increase in firms ’ demand for loans. the general level of interest rates, according to the survey respondents, is contributing most to the recovery in loan demand. as i have already mentioned, an important transmission channel for asset purchases relates to the fact that different assets are imperfect substitutes. consequently, interventions by the central bank that affect the supply of various assets available to private investors influence the prices of many other assets, including investment grade bonds, equities, real estate and foreign assets, with consequences for the exchange rate. figure 5 shows the increase in equity and bond prices ( the latter illustrated by investment grade corporate bond yields ). bis central bankers ’ speeches figure 5 the ongoing deterioration of long - term inflation expectations was a major factor in the extension of our purchase programme in january this year. figure 6 shows the evolution of these expectations over the past decade and since 2012. euro area longer - term inflation expectations ( both market - based and, to a lesser extent, survey - based ) had been falling since early 2013, reaching an all - time low by early 2015. figure 6 bis central bankers ’ speeches expectations of inflation five years ahead, as expressed in the ecb survey of professional forecasters, fell from 1. 98 % in the first quarter of 2013 to 1. 77 % in the first quarter of 2015. the five - year inflation - linked swap rate five years ahead fell from 2. 4 % to 1. 5 % over the same period. since january 2015 this declining trend has been reversed. both market - based and survey - based measures of longer - term inflation expectations have recovered from their lows. while broadly similar dynamics in market - based measures of longer - term inflation expectations have been observed in other countries, the decline

and innovative economy, as intended by the “ lisbon agenda ”. once there is a convincing commitment to implementing comprehensive structural reforms to foster the growth perspective of the euro area, confidence will increase among all economic actors, including consumers. the upswing that we currently foresee is a sign that confidence is returning, but for the economic recovery to be sustained it is essential that excessive deficits are corrected and that the reforms currently being discussed are carried out. 2. the draft eu constitution for the last two years, the eu has been engaged in intense debates on a future constitution for the union. these debates resulted in the draft constitution presented by the convention in june and are now culminating in the intergovernmental conference, which is seeking to finalise the constitution before the end of this year. the ecb has followed the constitution - building process with great interest and welcomes all efforts to further the construction of a united europe. when the european union re - writes its rulebook by giving itself a constitution, does this mean that there will be profound changes to the provisions relating to the ecb and to monetary union in general? throughout the process of drafting the constitution, the ecb has consistently advocated that the monetary constitution of the eu - the basic set of rules and provisions for emu, as laid down in the maastricht treaty - is sound both in terms of the objectives set and the allocation of responsibilities between different actors and levels of government. i am grateful that the convention has followed a similar line of reasoning. its draft constitution takes over the provisions relating to emu without changes in substance. the single monetary policy is, by its very nature, indivisible. thus, it is an exclusive competence of the union. the conduct of monetary policy has been assigned to an independent european central bank, which fulfils this task together with the national central banks of the euro area and with the clear primary objective of maintaining price stability. the european system of central banks is explicitly mentioned in the first part of the draft constitution. however, further refinements to the draft constitution are possible, and the ecb has made several suggestions. for example, we strongly believe that price stability should be added to the list of the union ’ s objectives set out in the first part of the constitution, as price stability is of great importance not only for the ecb but for the union as a whole. it ensures confidence in the long - term value of the euro and translates into low and stable medium