banks to take additional capital. i find it to some extent peculiar that host supervisors and subsidiaries of banks headquartered in the eu, as a part of the vienna initiative, agreed regarding the carrying out of stress testing, and if necessary, recapitalization. but such an exercise is not foreseen in the home country. in addition to that, lending should be revived as well, but for this, i admit, i do not have a ready made formula how to do it. third, the vienna initiative should be extended to the entire region as i in belgrade could sleep much more calmly if the majority of the countries would have such an agreement. once we have finalized our deal, i hope in a matter of days, the deal makers should focus on all other countries as spill over effect is very large : a rumor regarding any bank in serbia or croation circulates in the region in matter of hours and could cause irreversible damages. fourth ifis ’ money should start rolling – as we are entering a crucial time period of the crisis in the second half of this year. time of statements, commitments, letters of intent etc. is over ; banks, investors, debtors need nothing more but money. the proof of the pudding is in eating, and this is now the time to proof what do the ifis stand for. last but not least, politicians in the region must manage realistic expectations and get ahead of the curve. this cannot and should not be done by brussels ( eu ) or washington ( imf / wb ). politicians in most of the countries do look down to the local population although they are pretty much aware how this crisis will affect them. it is finally time to be proactive, serious and stop spreading false expectations. the situation today in the region, to some extent, is even more serious than at the beginning of the transition process : this time tough reforms must be made just for, in the best case, to maintain the current standard of living!

yves mersch : monetary policy in the euro area - a brief assessment speaking points by mr yves mersch, member of the executive board of the european central bank, at the mni connect roundtable, singapore, 10 october 2018. * * * the euro area economy is currently experiencing a broad - based economic expansion. although growth moderated somewhat in the first half of this year, following several strong quarters in 2017, we expect the expansion to continue at a pace slightly above potential in the period ahead. at the same time, risks relating to increased global protectionism and vulnerabilities in emerging markets warrant continued monitoring. monetary policy measures introduced since 2014 have been pivotal to these developments. they have set - in - train a return of euro area inflation to a rate below, but close to, 2 % over the medium term. real gdp expanded by 0. 4 % quarter on quarter in the second quarter of 2018 – the 21st consecutive quarter of positive growth – with the level of real gdp 10 % above the trough. while the external environment is less favourable, the underlying strength of the euro area economy is expected to persist on account of strong domestic demand dynamics. this ongoing expansion has led to strong employment gains. there are now 9. 2 million more people employed in the euro area than at the low - point in mid - 2013 and the unemployment rate is at its lowest level for almost a decade. the investment outlook also continues to strengthen and is supported by an ongoing need to modernise the capital stock after years of subdued investment, as well as by very favourable financing conditions, an improvement in profitability and solid demand. since we announced our policy measures in june 2014, financial conditions have eased considerably. lending rates for non financial corporations and households have dropped by around 130 basis points and 110 basis points, respectively. rates on very small loans, which can be taken as a proxy for loans to small and medium sized enterprises ( smes ) have declined by more than 210 basis points. heterogeneity of lending rates across countries has also fallen sharply, which indicates that the pass - through of our monetary policy has become more even. at the same time, loans to euro area households and firms continue to remain favourable with annual growth of 3. 1 % and 4. 2 % in august 2018, respectively. this pick up in credit growth has not led to a crowding out of other forms of external finance for euro area nfcs, with firms continuing to issue new equity. overall, this