, the euro area and the eu as a whole have demonstrated their ability to act decisively and promptly in difficult circumstances. national measures have been coordinated in a pragmatic manner with a view to enhancing their effectiveness through mutual reinforcement. i am therefore surprised to hear voices here and there arguing that policy - makers in the euro area were – or still are – “ behind the curve ”, have done too little, too late, and ought to have learnt more in terms of responsiveness from their colleagues in other parts of the world. i do not want to talk about this issue in any detail. as a matter of fact, the epicentre of the current crisis lies outside the euro area, and the euro area has not had to deal with the failure of a major financial institution or a bank run. let me begin with the response of the eurosystem, which has fully respected – in terms of the allocation of responsibilities – the distinction between monetary policy and fiscal policy. since the very start of the tensions in the euro area money market almost two years ago, the ecb has taken forceful, timely and pre - emptive policy action to counter the adverse effects of the financial crisis. against the backdrop of rapidly receding inflationary pressures and without compromising on our mandate to maintain price stability over the medium term, we have cut the interest rate on our main refinancing operations by 325 basis points since last october. that interest rate now stands at 1. 0 %, the lowest level since the launch of the euro. in addition to these extraordinary rate cuts, the ecb has adopted a number of non - standard measures allowing it to provide banks with substantial amounts of liquidity and thereby support the flow of credit to the real economy. i would just like to remind you that in terms of financing, the banking system plays a more important role in the euro area than in other major economies. the non - standard measures we have chosen are therefore directed mainly at banks. this means that the eurosystem ’ s response to the crisis cannot be compared directly with those of other major central banks. we have our own approach. more specifically, we have provided the banking system with unlimited amounts of liquidity at the main refinancing rate against an expanded list of eligible collateral. coupled with the fact that more or less all financially sound euro area credit institutions are able to participate in the eurosystem ’ s refinancing operations, this has significantly eased banks ’ balance sheet constraints,

providing us with a rich and interesting database. however, insights of that kind will be of more use to us in the long - run. what is most important at present is to observe the functioning of the credit lending and interest rate channels. that is, to what extent and under what conditions banks lend to non - financial institutions and whether they pass on the enhanced terms of financing which they have been given by a looser monetary policy. credit channel when we try to detect changes in the lending behaviour of banks using the available data on credit contracts, we are confronted with the technical problem of separating credit supply from credit demand. in this respect, the eurosystem ’ s bank lending survey ( bls ), which was introduced six years ago, is a very helpful tool because it provides qualitative information on the lending behaviour of the surveyed banks. it has proved to be very valuable in the current financial crisis because it supplies us with some information that can be used to judge whether the euro area economy is facing a credit crunch or not. the results of the bls for germany show that credit standards for loans to enterprises and, to a lesser extent, also loans to households, have been tightened on average by the surveyed institutions since the outbreak of the financial crisis in summer 2007. there was a marked tightening in the credit standard for loans to enterprises, however, in the third quarter of 2008, after the collapse of lehman brothers. according to the surveyed institutions, refinancing costs and balance sheet constraints have been playing a major role in developments in credit standards since the beginning of the financial crisis. however, in the two most recent survey rounds, in which there was a very marked tightening of credit standards, additional factors were in play : the impact of the deterioration in the general economic situation and the increasing importance of industry or firm - specific developments. interest rate channel in order to examine the extent to which financial institutions have passed on their lower short - term refinancing costs in the current situation, the deutsche bundesbank has analysed financial institutions ’ short - term interest rates for corporate and housing loans. 4 the reason for focusing solely on the short - term interest rate is that the longer - term refinancing behaviour of financial institutions may have changed markedly in the course of the financial crisis. consequently, conventional measures for long - term refinancing conditions that have been used in the past may no longer be suitable. comparing the development in the three - month money market rate