is fully in line with the ecb ’ s monetary policy strategy and practice. the first pillar of our strategy, which gives a prominent role to the analysis of monetary developments, is based on the empirical evidence of a close and stable relationship between money and prices in the euro area over the medium term. there is no evidence yet to suggest that this link has weakened over time. the ecb is fully aware that monetary developments may be subject to portfolio shifts in the short term, which are not directly related to future spending decisions. indeed, what matters is to identify and understand the underlying reasons for monetary developments in order to assess the implications for the risks to price stability over the medium term. in this respect, the analysis of monetary developments has provided useful guidance to the ecb ’ s monetary policy also over the past year. this leads me to another point mentioned in the draft resolution, namely the importance for a central bank to take account of asset prices when assessing risks to price stability, while not introducing moral hazard in financial markets through inappropriate reactions to excessive asset price developments. the ecb fully shares this view. it closely monitors asset price developments as indicators for monetary policy but it does not target them or react to them mechanically. as regards the proposed endorsement of macroeconomic projections by the governing council of the ecb, allow me to clarify once again the role of those projections in the process of monetary policymaking at the ecb. these projections play an important role for us, but they have by no means an all - encompassing role. they are an important technical input by ecb and national central bank staff in summarising and assessing the implications of a large body of information for future inflation in a consistent way. however, we are also fully aware of the difficulties of making projections. in particular, we recognise that it is impossible to summarise all the relevant information for assessing the maintenance of price stability in one single projection. given the difficulties of forecasting over the longer term and the uncertainty regarding the appropriate economic model, we do not advocate the use of a single projection to analyse the risks to price stability. we therefore explicitly look at many other indicators and analyses in the context of our two - pillar strategy, and we do not try to hide the complexity of monetary policy - making behind the production of a single governing council forecast. the projections reflect the expert judgement of eurosystem staff and we prefer to keep this distinct from the judgement of the governing council regarding the overall assessment of the risks to

euro area bank lending survey for the third quarter of 2016 indicates some further improvements in both supply and demand conditions for loans to the non - financial private sector. furthermore, banks continued to report that the ecb ’ s asset purchase programme and the negative deposit facility rate had contributed to more favourable terms and conditions on loans. to sum up, a cross - check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed the need to preserve the very substantial amount of monetary support that is necessary in order to secure a return of inflation rates towards levels that are below, but close to, 2 % without undue delay. monetary policy is focused on maintaining price stability over the medium term and its accommodative stance supports economic activity. as emphasised repeatedly by the governing council, and as again strongly echoed in both european and international policy discussions, in order to reap the full benefits from our monetary policy measures, other policy areas must contribute much more decisively, both at the national and at the european level. the implementation of structural reformsneeds to be substantially stepped up to reduce structural unemployment and boost potential output growth in the euro area. structural reforms are necessary in all euro area countries. the focus should be on actions to raise productivity and improve the business environment, including the provision of an adequate public infrastructure, which are vital to increase investment and boost job creation. the enhancement of current investment initiatives, including the extension of the juncker plan, progress on the capital markets union and reforms that will improve the resolution of non - performing loans will also contribute positively to this objective. in an environment of accommodative monetary policy, the swift and effective implementation of structural reforms will not only lead to higher sustainable economic growth in the euro area but will also make the euro area more resilient to global shocks. fiscal policies should also support the economic recovery, while remaining in compliance with the fiscal rules of the european union. full and consistent implementation of the stability and growth pact over time and across countries remains crucial to ensure confidence in the fiscal framework. at the same time, all countries should strive for a more growth - friendly composition of fiscal policies. we are now at your disposal for questions. 2 / 2 bis central bankers'speeches