##rs, issuers have been able to place new securities in the market in large volumes, which suggests that liquidity has not been materially affected by our actions. thus the most difficult part of our programme is our corporate bond purchases, since they extend into less liquid markets and increase the risk of distortions in relative prices – in particular between larger and smaller firms. but our activities cannot be evaluated in separation ; they must be judged in a holistic manner. indeed, up to now the decline in bank lending rates for small loans to euro area companies – which are mainly for small and medium - sized enterprises ( smes ) – has been stronger than for large loans to bigger companies. this suggests that bank lending conditions have improved disproportionately for euro area smes since the announcement of our credit easing measures two years ago. as a result, fewer smes are reporting that credit has been a limiting factor for their businesses. this should only continue as our measures are fully rolled out and reach their maximum bis central bankers ’ speeches impact. in other words, the app, coupled with our other credit easing measures, has reduced distortions caused by market fragmentation in the euro area. still, we know that the longer unconventional policy lasts, the greater the risk of distortions appearing and diminishing its effectiveness over time. the principle of proportionality also implies that we should only use such measures for as short a time as is necessary to fulfil our mandate. that is why, when the economy improves and inflation returns to our objective, we will have to reassess, adjust and ultimately phase out our purchase programmes and other non - standard measures. but the surest way to reach that point is to stay true to the course we are on now. if we were to change speed or direction too soon, it would only set back the recovery of inflation and delay the day that interest rate normalisation can happen. we will decide upon this in full independence, in the interests of price stability, impervious to the wishes of any interest group with any partial agenda. other policies can support the speed with which inflation returns to 2 % can other policies help in this endeavour? in the inflationary days of the 1970s, some central bankers were so hesitant about the scope of their responsibility that they let price stability depend on others. for example, in the late 1970s the then fed chairman reported to the fomc that “ inflation is going to be left to the federal reserve and that ’

process in the euro area. consequently, trade of goods and services among euro area countries will continue to grow at a sustained rate, thereby contributing to increased competitive pressure on product markets that would otherwise only have been achieved through reforms on the level of each individual member country. this further integration will put pressure on euro area member countries to provide the most appropriate framework for employment and enterprise creation and the development of the productive forces and therefore to adjust also their labour and capital markets to the new reality of the single currency. in this context fiscal policy can make an important contribution. first, it can contribute to macroeconomic stability by providing economic agents with expectations of a predictable economic environment. this reduces uncertainty and promotes longer - term decision - making, notably investment decisions, and economic growth. furthermore, it is important to keep in mind that fiscal policy can also promote growth and employment via appropriate adjustments of the level and composition of government taxes and expenditures. reducing inefficient public spending can for example help to finance tax cuts or be redirected towards productivity - enhancing physical and human capital accumulation. changes in the monetary policy regime and changes in price and wage setting the creation of a single currency and the introduction of the euro not only raises pressure to speed up the structural reform process but will also change profoundly the behaviour of the euro area economies and in particular the way prices and wages are set. i have already mentioned the increasing integration and growing intra - euro area trade resulting from the introduction of the euro. in addition, the commitment of the ecb to price stability creates the conditions for low inflation across the euro area. both will increase competition among european producers, limiting their pricing power and helping to keep inflationary pressures confined. additionally, with increasing competitive pressure and reduced scope for pricing power, enterprises are led to look for alternative ways to increase their resilience and to enhance their competitiveness. this will provide an additional boost for productivity growth and raising potential output growth. similarly, the introduction of the euro has an important impact on the dynamics of wages, helping to keep them in line with productivity developments. on the one hand, increased competitive pressure among european firms reduces any rents they may have been able to earn in the past and increases their labour demand elasticity. this will tend to increase real wage flexibility. on the other hand, the low - inflation commitment of the ecb provides a stable anchor for low inflation expectations and a lower inflationary bias on the side of labour. moreover, the absence of specific monetary policy