of npl secondary markets across the euro area, in other words, that npls is not only a greek problem, but it is also a concern to other south european countries, ` 2 including cyprus, italy, portugal, etc. my focus will then be the recent developments in tackling the greek non - performing loans problem including the two recent systemic proposals, one by us at the bank and one by the hfsf. 2. npls : the broader context across the european banking sector a. recent developments npl ratios continued to decline last year across the european union, confirming the overall trend of improvement over recent years. the latest figures show that the gross npl ratio for all eu banks further declined to 3. 4 % ( q3 2018 ), to the lowest level since 2014, indicating that the npl ratio is approaching pre - crisis levels again ( chart 2 ). the coverage ratio has also further improved and has risen to 46 % ( q3 2018 ), up 3 percentage points since 2014. chart 2. eu bank total non - performing loans source : eba, risk dashboard, data as of q3 2018. however, the situation continues to differ significantly between member states as 12 eu member states have npl ratios of below 3 %, while there are still some with considerably higher ratios – 9 member states have ratios above 5 % ( chart 3 ). in member states with relatively high npl ratios, there is encouraging and sustained progress in most cases ` 3 due to a combination of policy actions and the growth impact. for instance, in cyprus, npls have continued to fall since the end of 2015 with the npl ratio around 34 % and are expected to decline more sharply this year. in italy, where the npl ratio is currently around 9. 7 %, the securitisation scheme supported by state guarantees ( known as gacs ) was introduced in 2016 and extended for another six months in september 2018. several other market infrastructure initiatives are also helpful towards tackling npls. for example, in portugal that has an npl ratio of 12. 4 %, initiatives targeted at promoting smooth coordination among creditors ( to accelerate credit restructuring, npl sales, etc. ) are a welcome addition to the existing policy mix. chart 3. npl ratios in eu member states source : eba, risk dashboard, data as of q3 2018. in this context, last december, the european council presidency and the european parliament agreed on a new framework for banks

point has required considerable monetary policy support. the euro area is looking back on several years of exceptionally low interest rates and unconventional monetary policy measures. the ecb ’ s key interest rates have been at unprecedented low levels since 2009. they have been supported by a series of unconventional measures, introduced in the face of a protracted recession and persistently low inflation. while we are now at the point where we anticipate – subject to incoming data confirming our medium - term inflation outlook – that we will end net asset purchases at the end of the year, significant monetary stimulus will still be needed to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2 % over the medium term. even after we end our net asset purchases, monetary stimulus will continue to be provided by the guidance we have given namely that we expect to keep interest rates at their present levels at least through the summer of 2019 and to maintain the stock of assets on our balance sheet by reinvesting maturing bonds purchased under the asset purchase programme for an extended period of time 1 / 3 bis central bankers'speeches after the end of our net asset purchases. but the overall favourable outlook and our still accommodative stance should not invite complacency. although on the whole the risks surrounding the euro area growth outlook can still be assessed as broadly balanced, risks relating to protectionism, vulnerabilities in emerging markets and financial market volatility remain / are prominent. we are seeing a growing willingness to question multilateralism, which has underpinned global growth since the end of the second world war. the protectionist trade measures implemented may have had very limited effects thus far, but the escalation of trade tensions is undermining confidence. financial stability allow me also to say a few words about euro area financial stability. the financial stability environment in the euro area overall remains favourable, but it has become somewhat more challenging in recent months. the results of the european stress test published last friday show that euro area banks are increasingly resilient to financial shocks. this also reflects the continuing economic expansion, which has strengthened private and public balance sheets alike. still, there are risks. these include liquidity risks in the non - bank financial sector that could be transmitted to the broader financial system. developments in this area should be closely monitored, and the regulatory and supervisory framework for non - banks needs to be strengthened. asset prices also require close monitoring. while there is currently no compelling evidence