the determination of the eurosystem to fight inflation. as christine lagarde said at last week's ecb press conference, " inflation is projected to remain too high for too long. " ladies and gentlemen, 2 / 5 bis - central bankers'speeches we all know that the effects of monetary policy show up with a time lag. this means that it takes some time before the economy fully digests and incorporates policy changes. recent financial market volatility has added another layer of uncertainty. all this underlines the importance of a data - dependent approach to the governing council's policy rate decisions. three components – or determinants – are key here : first : the assessment of the inflation outlook based on incoming economic and financial data. second : the dynamics of underlying inflation. third : the strength of monetary policy transmission. on this third point, we are beginning to see the transmission of monetary policy measures through the credit channel. it remains to be seen if and to what extent the recent tensions in parts of the banking sector will lead to a further tightening of financing conditions. but to be clear, the underlying price pressures in germany and the euro area remain high. if monetary policy fails to tame them, the cost to our economies would be much higher. thus, it is the responsibility of the eurosystem to ensure a timely return of inflation to the 2 % medium - term target. 3. 3 scaling back app march also marks the starting point for shrinking the size of the eurosystem's asset purchase programme, or app. in concrete terms, this means that the central banks in the eurosystem will reduce their bond holdings by not replacing eur 15 bn of maturing securities each month. from a market - functioning perspective, there are good reasons for taking such a measured approach. first : the ease of absorption of higher bond volumes hinges on how market participants evaluate the outlook for inflation and the expected rate path, amongst other things. second : having suffered substantial mark - to - market losses in their fixed income portfolios last year, investors remain vigilant about interest rate risk weighing on the valuation of their portfolios. a large share of this year's elevated bond issuance will most likely hit the market in the first half of this year. central banks have little experience with the process of balance sheet tightening. certainly, the process of quantitative tightening will not simply be the mirror image of quantitative easing. importantly, markets reacted calmly to the eurosystem's

burkhard balz : closing remarks - " strengthening the national bank of belarus " closing remarks by mr burkhard balz, member of the executive board of the deutsche bundesbank, at the eu twinning project " strengthening the national bank of belarus ", minsk, 10 july 2019. * * * 1 introduction mr kalechits, mr samecki, ms kuniyoshi, ms wiktorin, your excellencies, distinguished guests, ladies and gentleman, first of all, i would like to thank you for the warm welcome and your kind introductory remarks. i ’ m delighted to be here in minsk today to celebrate with you all the successful conclusion of the eu twinning project with the national bank of the republic of belarus, narodowy bank polski, lietuvos bankas and the deutsche bundesbank. just a few days ago, our countries were still engaged in sporting rivalry as part of the 2nd european games here in minsk. the city was abuzz with more than 4, 000 athletes from 50 nations, and when i look around me, there are still lingering reminders of this event. what we are celebrating today, though, has attracted slightly less public attention, even though it is certainly no less significant. it is something that our central banks – representing our four countries – have achieved together : the first eu twinning project for belarus and the first eu twinning project for the national bank of the republic of belarus. it ’ s something that all the stakeholders can be proud of. and that ’ s why i ’ d like to take this opportunity to thank everyone involved for all their dedication and hard work. 2 the role and task of central banks ladies and gentlemen, on 14 may, the european union marked the 10th anniversary of the eastern partnership in brussels together with the six eastern partnership countries, including belarus. jean - claude juncker, president of the european commission, used this high - level conference to emphasise that the eastern partnership is fundamentally a future - oriented partnership for the citizens and with the citizens. he said : “ together we are working towards stronger economies, stronger governance, stronger connectivity and stronger societies. ” while our eu twinning project is just one building block in this broadly based cooperation process, no one should overlook the fact that central banks in particular are important government institutions. after all, they ensure that monetary systems continue functioning both at a national and an international level. economic systems based on the division of labour need stable money to