now, this is completely unhelpful? i think the press statement by eba somehow hints at that, because they say that there wouldn ’ t be another exercise next year. to be fair to eba, the shape of the exercise was decided at a time when the biggest economic threat seemed to be the banking system ’ s lack of credibility. people feared banks ’ balance sheets concealed fragilities that in the end would strain the economies. so they started this exercise thinking that, being transparent, and marking - to - market sovereign bonds, would strengthen the credibility of the banking system and reduce risk premia. at the end, it did not work that way because of the sequencing. but i wouldn ’ t say it ’ s eba ’ s fault. the big point here though is, at least the world in 2011, has fundamentally changed, if not for the last two years, where a position where equities would be seen as more risky than government bonds is now in reverse …. the big change is that assets which were considered absolutely safe are now viewed as potentially unsafe. we have to ask what can be done to restore confidence. i would say there are at least four answers. the first lies with national economic policies, because this crisis and this loss of confidence started from budgets that had got completely out of control. the second answer is that we have to restore fiscal discipline in the euro area, and this is in a sense what last week ’ s eu summit started, with the redesign of the fiscal compact. however, we are in a situation where premia for these risks are overshot. when you have this high volatility – like we had after lehman – you have an increase in the counterparty risk. in the worst case, you can have accidents and even if you don ’ t have accidents, you have a much reduced economic activity because people become exceedingly risk averse. so the third answer to this is to have a firewall in place which is fully equipped and operational. and that was meant to be provided by the efsf. bis central bankers ’ speeches the fourth answer is to again ask : why are we in this situation. part of this had to do with fiscal discipline, but the other part was the lack of growth. countries have to undergo significant structural reforms that would revamp growth. and the fifth answer is that the idea of introducing private sector involvement ( psi ) in eurozone bail - outs was, in retrospect

mario draghi : ecb press conference - introductory statement introductory statement by mr mario draghi, president of the european central bank, and mr vitor constancio, vice - president of the european central bank, tallinn, 8 june 2017. * * * ladies and gentlemen, the vice - president and i are very pleased to welcome you to our press conference. i would like to thank governor hansson for his kind hospitality and express our special gratitude to his staff for the excellent organisation of today ’ s meeting of the governing council. we will now report on the outcome of our meeting. based on our regular economic and monetary analyses, we decided to keep the key ecb interest rates unchanged. we expect them to remain at their present levels for an extended period of time, and well past the horizon of our net asset purchases. regarding non - standard monetary policy measures, we confirm that our net asset purchases, at the current monthly pace of €60 billion, are intended to run until the end of december 2017, or beyond, if necessary, and in any case until the governing council sees a sustained adjustment in the path of inflation consistent with its inflation aim. the net purchases will be made alongside reinvestments of the principal payments from maturing securities purchased under the asset purchase programme. our monetary policy measures have continued to preserve the very favourable financing conditions that are necessary to secure a sustained convergence of inflation rates towards levels below, but close to, 2 % over the medium term. the information that has become available since our last monetary policy meeting in late april confirms a stronger momentum in the euro area economy, which is projected to expand at a somewhat faster pace than previously expected. we consider that the risks to the growth outlook are now broadly balanced. at the same time, the economic expansion has yet to translate into stronger inflation dynamics. so far, measures of underlying inflation continue to remain subdued. therefore, a very substantial degree of monetary accommodation is still needed for underlying inflation pressures to build up and support headline inflation in the medium term. if the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, we stand ready to increase our asset purchase programme in terms of size and / or duration. let me now explain our assessment in greater detail, starting with the economic analysis. euro area real gdp increased by 0. 6 %, quarter on quarter, in the first quarter of 2017, after 0. 5 % in the last quarter of 2016