published by our dutch colleagues shows that this is the case for our neighbour, too. [ 3 ] they write that low - productivity firms effectively receive a subsidy on capital, driving them to produce more than would be optimal. this has a negative impact on aggregate productivity. other working papers explore how cheap loans can help keep firms afloat that might otherwise have exited the market. [ 4 ] this can lead to excess capacity and put downward pressure on prices. a recent study finds that such dynamics could well be at work in europe. the low interest rate environment can create incentives that help sustain unproductive firms in the market. however, there is not [UNK] evidence to date of such causality. with that in mind, i see this as a risk thus far. turning our attention to germany, a bundesbank study conducted a couple of years ago concluded that the importance of low - productivity, non - competitive firms that should really have exited the market was small and had not increased in the low interest rate setting that had prevailed for some years. [ 6 ] this assessment is still valid, according to our experts. 4 monetary policy strategy separate from the issues surrounding the monetary policy stance, the ecb governing council has another item on its agenda this year : a review of its money policy strategy. this got underway just over a month ago. in the past few years, the bundesbank has already intensified its contact with the public, for which it has developed a variety of formats. as of now, the public is invited to comment on the strategy review of monetary policy through our website. in essence, it comes down to just one question : how can we best deliver on our mandate, which is to safeguard stable prices for people in the euro area? during its strategy review, the governing council of the ecb should not lose sight of the big picture. like a mosaic, its constituent stones need to fit together to create a meaningful whole. as we assess their fitness for purpose, we should not view them in isolation. i would like to proceed by discussing individual elements of our strategy in more detail and, in doing so, highlight some interactions as well. it starts with the definition of our objective. up to now, the ecb governing council has taken price stability to mean inflation rates of between 0 % and 2 %. based on this definition, it strives for inflation rates below, but close to, 2 % over the medium term. this was clarified the ecb governing council following the last

property market that is available at www. bundesbank. de / residential _ property. 4 the liquidity coverage ratio ( lcr ) is a supervisory minimum ratio of short - term liquidity that banks have to hold. in order to achieve the required lcr of at least 100 %, a bank ’ s available liquid assets have to surpass its expected cumulative net cash outflows over a period of at least 30 days. this is designed to ensure that banks are able to withstand a severe stress scenario, such as the coincidence of a partial run on customer deposits and the drying - up of unsecured funding. the lcr entered into force in january 2018. 5 the net stable funding ratio ( nsfr ) is a prudential ratio that measures the extent to which a bank has medium to long - term funding for its exposures. the nsfr standard is designed to ensure sustainable and stressresistant funding of a bank's asset - side business as well as its off - balance sheet activities. it is defined as the ratio of sustainable funding ( including equity capital and long - term liabilities ) over the required stable funding. the minimum ratio is 100 %. the nsfr rule is scheduled to enter into force in 2020. 6 this number is based on data from the bundesbank ’ s monthly bank balance sheet statistics as of january 2018 ( latest data : november 2017 ). it was calculated as the amount of loans by savings and cooperative banks to domestic non - financial firms and households relative to the total amount of loans by all monetary financial institutions ( mfis ) to the same sector. further information are available at www. bundesbank. de / navigation / en / statistics / banks _ and _ other _ financial _ institutions / banks / monthly _ balance _ sheet _ statistics 7 historically, changes in financial regulations have indeed often been driven by interests of incumbent firms and the political impact of " insiders " ( rajan and ramcharan 2016, rajan and zingales 2003 ). 6 / 6 bis central bankers'speeches