recently in medium - to longer - term inflation expectations is a cause for extra vigilance. in short, the latest data on the euro area economy point to a continued but increasingly fragile recovery and the uncertainties and downside risks surrounding the recovery have intensified. all the while, we are facing continuously sluggish money and credit dynamics – even if growth rates of some key aggregates have edged up in recent months. consistent with this subdued picture, the latest ecb staff projections foresee growth and inflation to pick up only gradually. and, by the end of the projection horizon, annual hicp inflation is still expected to fall short of our target of a rate of inflation of below, but close to, 2 % over the medium - term. it was against this backdrop of a persistently weak inflation outlook, a slowing growth momentum, and subdued monetary and credit dynamics that we decided on a package of bis central bankers ’ speeches measures between june and october to provide further monetary policy accommodation and support lending to the real economy. impact of june - october policy decisions the policy announcements since june, together with the rate cuts, have already led to a further considerable easing of the effective monetary policy stance – although the liquidity injections via the tltros and purchase programmes will only gain pace in the coming months. this additional easing is evident from various metrics of the market - based cost of financing. since the beginning of june, forward money market rates have shown steep declines across the maturity spectrum. now, the forward curve consistently lies below zero over a two - year horizon. eonia is not expected to exceed 25bps before well into 2018. the 3 - month euribor rate, which is an important conduit of monetary policy impulses to lending rates, dropped to all - time lows and now stands close to zero. and the policy decisions, in particular those announced in september, triggered a compression of spreads across other asset classes, including abs, covered bonds and sovereign bonds. the recent sharp compression of abs spreads since june is particularly important. to the extent this compression of secondary market spreads is passed - through, this would support loan origination and promote credit flows at lower lending rates. as indicated, this market response has materialised although the lion ’ s share of the liquidity injection of the measures is yet to come. in september, we conducted only the first out of eight tltros. notably in december, counterparties will have another opportunity to participate in the t

pooling sovereignty on issues of direct common interest became the new basis for cooperation between the european nations. at the time such a project seemed bold and optimistic – just as calling for further, deeper integration seems bold and optimistic today. but our founders were right. europe has delivered peace, prosperity and political stability for a period of time that has no precedents in its modern history. this year marks the 60th anniversary of the treaty of rome that created the european union and the 25th anniversary of the maastricht treaty that created the monetary union. further progress is needed. the institutional architecture of the economic and monetary union remains incomplete in a number of aspects. the crisis has exposed structural weaknesses in our construction and has forced us to address them. the repair has started with the creation of 1 / 2 bis central bankers'speeches the banking union. but the work is far from over and the challenges we face go beyond economic and monetary union. they pertain to security, migration, defence, and generally all those challenges that can be addressed only by pooling sovereignty. and these challenges are greater than in the past. today we can sense a rising wave of energy in demanding joint european action. the european union and the euro always commanded the support of the majority of european citizens, but, often, it was only the vocal opposition that was heard. now this silent majority has regained its voice, its pride, and its self - confidence. only by working together can the nations of europe overcome these challenges. the opportunity for progress is real. values and judgement lie at the heart of all our undertakings. but they need to be supported by continuing research, ever increasing knowledge, and uncompromising examination of facts. this was true in addressing the great financial crisis, designing and implementing policies that improve the world economy and building institutions that deliver peace and prosperity in europe. but it is also true in all the fields represented today by my fellow recipients. that is why we must be grateful to all places of knowledge, and today to the university of tel aviv. thank you once more, not only for the honour that you are bestowing upon us, but also for your ongoing contribution to our common good. 2 / 2 bis central bankers'speeches