well as the highly accommodative financing conditions which have been passed through to lower borrowing costs for euro area firms. the resilience of the recovery reflects the strength of domestic demand which in turn, is being supported by the very favourable financing conditions stemming from the monetary policy measures introduced since june 2014 ( see chart 1 ). 1 / 7 bis central bankers'speeches source : bloomberg, ecb, ecb calculations. 1 ecb staff counterfactual simulations indicate that absent our measures, gdp - weighted euro area 10 - year government bond yields would, at present, be about 154 basis points higher and lending rates to nfcs about 68 basis points higher. ecb staff estimates indicate that our measures are contributing to an increase in euro area gdp of around 1. 7 %, cumulatively over the period 2016 – 2019 ( see chart 2 ) – well above monetary policy ’ s contribution to the two previous euro area recoveries in 2003q2 - 2006q4 and 2009q3 - 2011q3. 2 / 7 bis central bankers'speeches 3 / 7 bis central bankers'speeches sources : ecb computations, sapi task force, september 2017 mpe, bmes. 2 looking ahead, the latest ecb staff projections continue to expect domestic demand to remain the key driver of euro area growth. annual real gdp is projected to increase by 2. 2 % in 2017, 1. 8 % in 2018 and 1. 7 % in 2019. the risks to the growth outlook are broadly balanced. according to the latest imf weo projections, euro area real gdp is expected to grow by 2. 1 % in 2017 before moderating to 1. 9 % in 2018 and 1. 7 % in 2019, which is in line with the ecb projections. there are reasons to believe that the strengthening of economic activity, which so far has been significantly supported by accommodative monetary policy, will progressively be supported by more structural factors. euro area governments have undertaken substantial policy actions and reforms to redress pre - crisis related macroeconomic imbalances and increase economic resilience. 3 for instance, euro area countries which had previously experienced large current account deficits are now in surplus. moreover, both ecb staff and imf estimates indicate that the largest driver of this adjustment is non - cyclical in nature, which implies a higher likelihood of sustainability as the recovery continues. additionally, business cycle synchronisation across euro area countries has increased in recent years

of some statistics, for instance those on integrated accounts, reduce our ability to use them in real time. challenges for communication under stress as i mentioned earlier, implementing monetary policy under stress poses special challenges for communication. indeed, following deviations from the standard practices and the setting in motion of a learning process, central banks must re - establish a “ reputational equilibrium ” with their counterparts. in fact, the reason why in normal times the martingale property delivers interest rates close to the policy rate is to a large extent because market participants have learned to form, over a long period of time, correct expectations about the central bank ’ s liquidity policy. and, at the same time, market reactions to its open market operations are somewhat predictable for the central bank. however, once the usual pattern of liquidity provision is broken, it is difficult for the market to converge quickly to a new behavioural equilibrium since an adequate level of confidence and knowledge needs to be first restored on both sides. through communication and renewed predictability in its liquidity policy, a central bank can though succeed in restoring such equilibrium. let me now move to two – less operational – challenges that we have faced in the communication of our interventions during the present turmoil : ( 1 ) the “ moral hazard ” critique ; and ( 2 ) the need to underscore the distinction between liquidity management and monetary policy. the moral hazard critique some observers have recently criticised recent measures by central banks, including those taken by the ecb, on the grounds of moral hazard considerations. according to these critics, by reacting to the financial market tensions, central banks may contribute to “ bailing - out ” those who have triggered the tensions through excessive risk taking. it is true in my view that moral hazard issues need to be taken into account very seriously when central banks decide on measures to support the financial system in a situation of market turmoil. of course, any such support policy, if anticipated, will be taken into account when banks establish their risk management frameworks for “ tail ” events. still, one cannot generally conclude from this that central banks should not re - act and support the system in the case of severe tensions. to rigorously analyse moral hazard issues relating to financial crisis management by central banks, one first needs to distinguish between different but interrelated types of policy interventions. the reason for this is that the possible effects on incentives of different measures can be very diverse. however, this differentiation has often been missed when criticising central