factor in encouraging the suitable risk perception of each liability instrument, and thus in minimising the cost for taxpayers, is bail - ins. these establish a clear order for the incurring of losses by shareholders and creditors, and provision is made for this arrangement to be activated prior to any injection of public funds. in europe, given the political agreement reached on the recovery and resolution directive, a set of common rules will be adopted in the near future establishing a clear and homogeneous order of seniority of liabilities in the event of bank resolution, and it will ensure the administrative power to impose losses on the holders of each instrument. that will notably minimise the cost to taxpayers of bank bail - outs. but common rules are not enough. the only way to ensure the possible homogeneous application of these rules is through the creation of a common resolution authority for all countries. bis central bankers ’ speeches similarly, it is important to have a common resolution fund in place which ensures, under similar conditions, that there is the necessary financial support for those institutions which might need it, irrespective of the budgetary situation of the state concerned. these ingredients of the single mechanism – a single authority and a common fund – are as essential as the existence of uniform rules and regulations to ensure that holders of bank liabilities in any jurisdiction are treated the same and to severe the link between bank risk and sovereign risk. at the same time, the creation of a genuine single resolution mechanism is essential so that the single supervisory mechanism can operate effectively. otherwise, it would have to deal with complex interaction arrangements with a constellation of national resolution authorities – each managing its own funds – which would make its task notably more difficult. in this context, the legislative proposal submitted last july by the european commission is a good starting point. the ec proposes the creation of a single resolution agency or authority, ultimately reporting to the european commission, which would manage a common fund fed by contributions from the industry. it is common knowledge that the commission ’ s proposal is currently subject to intense debate. in particular, apart from the assignment of resolution powers to the european commission, three matters are prompting most discussion. first, the legal basis of the proposal – anchored in article 114 of the treaty – is being questioned by some countries, which even raise the need for a reform of the treaty. this is despite the favourable opinion on the proposed legal basis of the council ’ s legal services, the european commission and most member states. second, since the common fund

and its impact on the euro area economy at its last monetary policy meeting on 10 april, the ecb governing council confirmed that an ample degree of monetary accommodation remains necessary to safeguard favourable financing conditions and support the economic expansion. this will ensure that inflation remains on a sustained path towards levels that are consistent with our inflation aim – a rate of inflation which is below, but close to, 2 % over the medium term. we continue to expect the key ecb interest rates to remain at their present levels at least 1 / 4 bis central bankers'speeches through the end of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation consistent with our inflation aim. the governing council also confirmed its intention to continue reinvesting, in full, the principal payments from maturing securities purchased under the asset purchase programme. this will continue for an extended period of time past the date when we start raising the key ecb interest rates, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation. to preserve favourable bank lending conditions and the smooth transmission of monetary policy, and to support access to financing, in particular for small and medium - sized enterprises, the governing council decided in march to launch a new series of quarterly targeted longer - term refinancing operations ( tltro - iii ). they will start in september 2019 and end in march 2021. significant monetary policy stimulus is thus being provided by our forward guidance on the key ecb interest rates, reinforced by the reinvestments of the sizeable stock of acquired assets and the new series of tltros. the governing council stands ready to adjust all of its instruments, as appropriate, to ensure that inflation continues to move towards our inflation aim in a sustained manner. the benefits of our monetary policy measures have been sizeable and tangible. lending rates for euro area firms and households have declined to historic lows and converged across the region, and growth in bank lending volumes has significantly recovered since the beginning of 2014, thereby supporting investment and job creation. according to today ’ s preliminary flash data release provided by eurostat, there are now 9. 2 million more people in employment in the euro area than there were at the end of 2014, just before the ecb announced its expanded asset purchase programme, and 10. 8 million more than in the second quarter of 2013, when the number of people in work fell to its lowest point during the crisis. completing