upon its mandate has essentially not yet been tested. i strongly disapprove of this view. indeed, looking back over the last nine years or so, it would appear that the euro area has rather been affected by an unprecedented, particularly challenging sequence of adverse shocks for monetary policy, for instance the burst of the “ new economy ” bubble and the terrorist attacks in 2001. in particular, there have been a number of significant upside price shocks caused by exogenous factors outside the realm of monetary policy. in 1999 and 2000, and again in the years from 2004 to 2007, there was a rapid increase in the world price of crude oil. in 2001 there was a sharp acceleration in food prices. we are currently facing rapid increases in both the price of crude oil and other commodities and rising food prices at the same time. these price increases have been related to events both on the supply side, such as geopolitical disruptions and animal diseases, and on the demand side, more recently in particular the accelerated integration of china and other asian countries in the world economy and the concomitant increase in the global demand for food and commodities. with 3. 5 % in march the inflation rate has reached a new high in emu. this is a reason for concern. the current elevated level of inflation is having already an adverse effect on consumer confidence, as households observe an erosion of their purchasing power. containing these inflationary pressures is therefore crucial to supporting domestic demand. the public well understands the centrality of credible price stability for sustainable economic growth. as you know, monetary policy can, because of the long transmission lags of monetary policy measures, not fend off the inflationary effects of such price shocks at short horizons. any attempt to do so would instead make monetary policy itself a source of volatility and instability. therefore, monetary policy has no choice but to accommodate the mechanical first - round effects of these shocks on headline inflation. accommodating these first - round effects of price shocks does not pose a risk to price stability over the medium term per se, since the effect of even a permanent increase in the level of the relative prices of commodities and food will have only a temporary impact on inflation. what is key for the maintenance of price stability over the medium term is that the temporary increases in inflation arising from such exogenous price shocks do not become ingrained in inflation expectations, giving rise to broad - based second - round effects on wage and pricesetting behaviour, eventually

point has required considerable monetary policy support. the euro area is looking back on several years of exceptionally low interest rates and unconventional monetary policy measures. the ecb ’ s key interest rates have been at unprecedented low levels since 2009. they have been supported by a series of unconventional measures, introduced in the face of a protracted recession and persistently low inflation. while we are now at the point where we anticipate – subject to incoming data confirming our medium - term inflation outlook – that we will end net asset purchases at the end of the year, significant monetary stimulus will still be needed to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2 % over the medium term. even after we end our net asset purchases, monetary stimulus will continue to be provided by the guidance we have given namely that we expect to keep interest rates at their present levels at least through the summer of 2019 and to maintain the stock of assets on our balance sheet by reinvesting maturing bonds purchased under the asset purchase programme for an extended period of time 1 / 3 bis central bankers'speeches after the end of our net asset purchases. but the overall favourable outlook and our still accommodative stance should not invite complacency. although on the whole the risks surrounding the euro area growth outlook can still be assessed as broadly balanced, risks relating to protectionism, vulnerabilities in emerging markets and financial market volatility remain / are prominent. we are seeing a growing willingness to question multilateralism, which has underpinned global growth since the end of the second world war. the protectionist trade measures implemented may have had very limited effects thus far, but the escalation of trade tensions is undermining confidence. financial stability allow me also to say a few words about euro area financial stability. the financial stability environment in the euro area overall remains favourable, but it has become somewhat more challenging in recent months. the results of the european stress test published last friday show that euro area banks are increasingly resilient to financial shocks. this also reflects the continuing economic expansion, which has strengthened private and public balance sheets alike. still, there are risks. these include liquidity risks in the non - bank financial sector that could be transmitted to the broader financial system. developments in this area should be closely monitored, and the regulatory and supervisory framework for non - banks needs to be strengthened. asset prices also require close monitoring. while there is currently no compelling evidence