strengthen our union from an economic, fiscal and legitimacy perspective. and in a world tempted by protectionism and ring - fencing, completing economic and monetary union is perhaps more urgent than ever before. conclusion allow me to conclude. the euro area has certainly faced its fair share of challenges in recent years. but things are clearly improving. in the euro area, the economic recovery has evolved from being fragile and uneven into a firming, broad - based upswing. the ecb ’ s monetary policy measures have been supporting this recovery. we have established four criteria to confirm a sustained adjustment in the path of inflation consistent with our definition of price stability in the medium term that would warrant a scalingback of the current degree of monetary policy accommodation. first, that headline inflation is on a path to levels below, but close to 2 % over a meaningful medium - term horizon ; second, that inflation will be durable and stabilise around those levels with sufficient confidence ; third, that inflation will be self - sustained, meaning it will maintain its trajectory even with diminishing support from monetary policy. and finally, the relevant metric in each case is euro area inflation, not the inflation rates of any individual country. however, in order to reap the full benefits of our monetary policy measures, other policy areas must contribute much more decisively to strengthening economic growth. this depends on the policies pursued by member states, where national parliaments have a key role to play. but it also depends on our collective ability to further strengthen the architecture of economic and monetary union in a way that fully reflects the interdependence among the euro area economies. pursuing such policies will ensure a higher growth trajectory. i am now at your disposal for questions. 1 see ecb press release of 15 december 2016 : governing council statement on macroprudential policies 2 see structural reforms, inflation and monetary policy, introductory speech by mario draghi, president of the ecb, 4 / 5 bis central bankers'speeches ecb forum on central banking, sintra, 22 may 2015. 3 the five presidents ’ report : completing europe ’ s economic and monetary union 5 / 5 bis central bankers'speeches

outline suggested changes to basel i. in part, these proposed changes are meant to address concerns about the potential adverse competitive effects of basel ii. the federal reserve takes concerns about competitive effects seriously and has conducted substantial research on the topic. during the process to amend basel i, we sought input from the industry and other interested parties. in view of those concerns, regulators have proposed changes to enhance the risk sensitivity of u. s. basel i rules ; we also remain vigilant about identifying potential competitive distortions that might be created with the introduction of basel ii. we are also mindful that amendments to basel i should not be too complex or too burdensome for the multitude of smaller banks to which the revised rules would apply. that is, in amending basel i for these institutions, we are trying to find the right balance between added risk sensitivity and regulatory burden. that balance is not necessarily easy to find. for example, one way to tie regulatory capital more closely to risk under basel i would be to expand the number of factors used to determine risk weights - for example, to include credit scores or external credit ratings. the tradeoff is that incorporating additional risk measures is likely to increase the burden of calculating regulatory capital. the comments received suggest that institutions differ on how best to make this tradeoff. we will continue to evaluate this tradeoff and solicit further comments on how to proceed. conclusion we expect that risk management and banking supervision will continue to develop along parallel tracks. the basel ii framework represents an important effort by supervisors to integrate leading - edge risk management practices with the calculation of regulatory capital requirements. the ongoing work on this framework has already led large, complex banking organizations to improve their systems for identifying, measuring, and managing their risks. indeed, banking organizations of all sizes have made substantial strides over the past two decades in their ability to measure and manage risks. the banking agencies will continue to promote supervisory approaches that complement and support banks'own efforts to enhance their risk - management capabilities.