percent and a broad index of metals prices losing about one - third of its value, dragging down growth in many commodity producers. although rapid commodity output growth in recent years, which has reflected in part the response of producers to previous price increases, has certainly contributed to the fall in commodity prices, the slowing of demand growth from china and emerging asia has also been an important factor. while the path ahead for commodity prices is, as always, uncertain, declining investment rates in emerging asia, particularly china, present the prospect of a prolonged decline in the growth rate of commodity demand. and prices could remain low for quite some time, which seems particularly true for metals, such as copper and steel, used heavily in construction and investment. however, for oil, the implications of a shift from investment - led growth to a consumption - led model are less certain. on a per capita basis, china ’ s consumption of oil remains far below that of advanced economies, in line with china ’ s lower rate of car ownership. per capita oil consumption tends to increase with wealth, such that further bis central bankers ’ speeches income growth in china has the potential to provide strong support for the oil market in the coming years. indeed, more generally, the world stands to benefit from a transition to more consumption - led growth in emerging asia. under a successful transition toward more - balanced growth, emerging asia can be expected to import a broader array of goods and services both from within the region and globally. whether a country benefits from or is harmed by emerging asia ’ s transition is likely to be determined by the flexibility of that country ’ s economy in adapting to shifts in asian demand away from commodities and inputs for assembly into the region ’ s exports and toward services and goods to meet asian final demand. to recap, the transition to slower growth in the emerging asian economies, as well as a shift toward domestic demand and consumption and away from external demand and investment in the region, is likely to have profound implications for the global economy. for one, trade growth is unlikely to resume its rapid pace of recent decades, and the long climb in commodity prices, which has benefited commodity producers, appears to have come to an end. can india recharge growth in emerging asia? one source of uncertainty in this outlook, as alluded to earlier, is the prospect for india to provide a new growth engine for asian development. in principle, india has enormous potential to recharge the asian growth engine. for one, india is relatively un

##able covered securities, and thus more loans to collateralise them. second, outright interventions in this market will complement abs purchases by reinforcing the portfolio rebalancing channels of transmission and generating positive spill - overs into other markets and securities. this will further ease funding and credit conditions and will help the transmission of monetary policy. the governing council has emphasised that the combination of measures announced between june and september will have a sizeable impact on the ecb balance sheet, which is expected to move towards the dimensions it used to have at the beginning of 2012. bis central bankers ’ speeches with the purchase programmes, we are starting a transition from a monetary policy framework predominantly founded on passive provision of central bank credit to a more active and controlled management of our balance sheet. conclusion the governing council remains fully determined to counter risks to the medium - term outlook for inflation. therefore, we stand ready to use additional unconventional instruments within our mandate, and alter the size and / or the composition of our unconventional interventions should it become necessary to further address risks of a too prolonged period of low inflation. let me add however that the success of our measures critically depends on a number of factors outside of the realm of monetary policy. courageous structural reforms and improvements in the competitiveness of the corporate sector are key to improving business environment. this would foster the urgently needed investment and create greater demand for credit. structural reforms thus crucially complement the ecb ’ s accommodative monetary policy stance and further empower the effective transmission of monetary policy. as i have indicated now at several occasions, no monetary – and also no fiscal – stimulus can ever have a meaningful effect without such structural reforms. the crisis will only be over when full confidence returns in the real economy and in particular in the capacity and willingness of firms to take risks, to invest, and to create jobs. this depends on a variety of factors, including our monetary policy but also, and even most importantly, the implementation of structural reforms, upholding the credibility of the fiscal framework, and the strengthening of euro area governance. originally, you had also chosen “ inflation differentials in the euro area ” as one of the topics of today ’ s hearing. i hope you will understand that given the important decisions we took in july and september, i have focused my remarks on our monetary policy measures. nevertheless, i of course stand ready and would be very interested to further discuss the matter of persistent inflation differentials, especially given their link to the structural reform agenda