to the perception that my counterparty can fail because of lack of capital. we can do little about that. bis central bankers ’ speeches then there ’ s another dimension to this that has to do with the premia that are being charged on sovereign states borrowings. these premia have to, as i said, with default, with liquidity, but they also have to do more and more with convertibility, with the risk of convertibility. now to the extent that these premia do not have to do with factors inherent to my counterparty – they come into our mandate. they come within our remit. to the extent that the size of these sovereign premia hampers the functioning of the monetary policy transmission channel, they come within our mandate. so we have to cope with this financial fragmentation addressing these issues. i think i will stop here ; i think my assessment was candid and frank enough. thank you. bis central bankers ’ speeches

the economy improves again? 8 i therefore remain convinced that delaying the reform process would have been counterproductive. second, one can exaggerate the effect of the zero lower bound. the ecb has employed various standard and non - standard measures that have helped to smooth the adjustment process for stressed countries. the provision of liquidity to banks through fixed - rate tender procedures with full allotment, and against an expanded list of eligible collateral, has been crucial to prevent further catastrophic effects arising from the sudden stop that some countries experienced. 9 the expansionary monetary policy stance has ensured that inflation expectations remained well anchored over the medium term, thereby ensuring that short - run price adjustments do not translate into longer - term deflationary expectations. price stability has been also crucial in avoiding increases in the real values of nominal debts – increases which would be unwelcome throughout the euro area, but especially pernicious in countries under stress. there are monetary policy instruments that could be used in the event of downward risks to medium - term price stability, even if the nominal interest rate is constrained by the zero lower bound. third, besides monetary policy, we should also not forget the additional support for governments that came from external assistance, which also helped to offset the effects of a sudden stop. between 2010 and 2013 greece, ireland, portugal and cyprus requested financial assistance from the eu and the imf. in 2012, spain requested financial assistance from the eu for the recapitalisation of its banks. at the same time, a permanent solidarity framework – the european stability mechanism – was put in place, to provide financial assistance to member states in difficulty, thereby reducing threats to financial stability in the euro area. conclusions let me conclude. the crisis has been long and painful for many people in europe. nevertheless, and in spite of persistent challenges, much of the macroeconomic adjustment has now taken place. looking back, 2013 was certainly the year of the turnaround. since 2008, the current account deficits of stressed countries have narrowed substantially. greece, spain and portugal moved from double - digit deficits and in 2013 achieved slight current account surpluses. over the same period, the current account balance of ireland went from a deficit of around 5 % of gdp to a surplus of around 5 % of gdp. some of the adjustment certainly reflects a decline in imports due to the cyclical compression of domestic demand. but in spain, portugal and ireland, the larger part of the adjustment is attributable to robust