increased to 16 percent in 2007, up from 12 percent in 2006 and 6 percent in 2004. this development may be promoted by the fact that, in terms of volume, nearly 60 percent of the european securitisation market is eligible for eurosystem collateral purposes. as a measure of risk control the eurosystem generally refers to market prices and deducts a haircut from that value. if a market price is stale or not available, the eurosystem calculates a theoretical price itself. therefore, the submitted collateral is at any time valuated with up - to - date prices. if the ( daily ) valuated collateral falls below a certain level, the eurosystem makes a so - called margin call, requiring additional collateral from the counterparty. from a risk management perspective, time - varying haircuts may also mitigate, among other adequate measures, counterparty risks of the central bank. this instrument is also in use by the boe for evaluating collateral. it requires central banks ’ ability to assess the recoverability of the collateral appropriately. for this purpose the eurosystem continuously monitors the quality of its collateral very carefully. we should keep in mind, however, that in light of the financial tensions central bank repo transactions as such can only mitigate some funding tensions for banks. they do not address the fundamental cause of the problems, that is an overhang of illiquid assets on banks balance sheets due to former credit excesses. the current monetary policy stance in the eurosystem for setting the eurosystem monetary policy stance, however, the outlook on price stability is the magnetic needle of the governing council. it is only the possible repercussions of stress in financial markets on real economic developments and on the outlook for inflation that is of interest for monetary policy in that regard. against this background the fallout of the financial market tensions – but also the effects of higher commodity prices – will be a more moderate, but still resilient, global growth. the euro area remains on solid fundamentals with regard to real economic growth. this view is underlined by the eurosystem staff projections published yesterday. and also the outlook on germany as laid out in the bundesbank forecast published today supports this assessment. while we will see a moderation in growth rates over the coming quarters, both in the euro area and also in germany, already at the turn of the year we will have reached the through. moreover, the moderation in growth rates in

andreas dombret : the euro area – where do we stand? speech by dr andreas dombret, member of the executive board of the deutsche bundesbank, at the german - turkish chamber of trade and commerce, istanbul, 10 february 2015. * 1. * * introduction ladies and gentlemen thank you for inviting me to speak here at the german - turkish chamber of industry and commerce in istanbul. isaac newton once observed that “ we build too many walls and not enough bridges ”. istanbul has for centuries been a bridge between two continents – asia and europe. it seems to me that istanbul is therefore an excellent place to hold this year ’ s g20 meetings. after all, the purpose of these meetings is to build bridges between nations by fostering dialogue and the mutual exchange of information. and this objective is of course also pursued by the german - turkish chamber of trade and commerce. moreover, mutual exchange is essential in a globalised world where countries are no longer isolated islands but part of a closely interconnected community. the global financial crisis has highlighted how close these connections are and how quickly a problem in one corner of the world can spread around the globe. this truth applies all the more to countries sharing a common currency such as the member states of the euro area. back in 1999, eleven european countries adopted the euro as their common currency. today, the single currency is shared by 19 countries and more than 300 million people, which in my eyes makes it a success story. that said, it has not always been plain sailing. in the wake of the global financial crisis of 2008, the euro area slid into a financial crisis of its own. this was compounded in 2010 when greece entered into a sovereign debt crisis, triggering a sudden loss of confidence in other member states which eventually brought the euro area to the brink of collapse. extensive rescue packages along with non - standard measures taken by the ecb helped to calm the markets and prevented the crisis from escalating. to some commentators, the present situation is not much different. greece is again capturing the headlines. unrelated to greece, the ecb again gave the green light to nonstandard measures as a means of addressing the risks associated with too prolonged a period of low inflation. to obtain a clearer picture, let us take a tour of the euro area to see where we stand at present and where we are headed in the future. unsurprisingly, i will begin by focussing on the growth prospects of the german economy