similar dynamic for the net issuance premium firms have to pay when tapping the market. you can see this on the right - hand side. the premium rose strongly towards the end of the year but fully reversed its rise during the course of this year, much like in the covered bond market, as you can see on my next slide. 11 / 14 bis central bankers'speeches both charts together make clear that the drop in central bank allocations in primary markets since the start of the year has not left a void. banks in particular have taken up a larger share of supply in the primary market, keeping premia low and relatively stable. so, the tightening in financial conditions in credit markets in the last quarter of 2018 was, in all likelihood, unrelated to the eurosystem ending net purchases. it was rather the result of a sudden global flight to safety that put downward pressure on risky asset prices, similar to what we have been experiencing in recent weeks. but looking through the ups and downs, current market - based financing conditions for firms have returned to levels that are highly conducive to investment and job creation, thereby complementing our commitment to preserve favourable bank lending conditions through the launch of the new series of quarterly targeted longer - term refinancing operations, tltro iii, under which banks can borrow at highly favourable rates, conditional on their lending performance. 8 on my last slide you can see that this two - pronged approach has been successful. the start of the cspp, and the subsequent drop in spreads, triggered a healthy rebalancing of external funding by some, mainly cspp - eligible, firms and has thereby freed up bank balance sheet capacity to lend to cspp - ineligible firms. 12 / 14 bis central bankers'speeches the end of net purchases has not jeopardised this virtuous circle. today, thanks to our broad package of policy measures, a very large majority of euro area firms can freely decide on their optimal funding mix with few supply constraints. 9 conclusion taken together, there is convincing evidence that supports the view that the app has remained a considerable source of financial easing also after the end of net purchases. it continues to provide important accommodation in an environment of increased downside risks to growth and thereby supports the sustained convergence of inflation to levels closer to 2 %. since our decision to halt net purchases, further employment gains, increasing wages and the underlying strength of domestic demand continue to confirm the governing council ’ s central outlook of gradually rising

rates, tighter credit supply conditions and lower demand. our latest bank lending survey reported a tightening of overall credit standards, which was stronger than banks had expected in the previous round and suggests that lending may weaken further. weak lending has meant that money growth has also continued to decline. conclusion summing up, the inflation outlook continues to be too high for too long. in light of the ongoing high inflation pressures, the governing council today decided to raise the three key ecb interest rates by 25 basis points. overall, the incoming information broadly supports the assessment of the medium - term inflation outlook that we formed at our previous meeting. headline inflation has declined over recent months, but underlying price pressures remain strong. at the same time, our past rate increases are being transmitted forcefully to euro area financing and monetary conditions, while the lags and strength of transmission to the real economy remain uncertain. our future decisions will ensure that the policy rates will be brought to levels sufficiently restrictive to achieve a timely return of inflation to our two per cent medium - term target and will be kept at those levels for as long as necessary. we will continue to follow a data - dependent approach to determining the appropriate level and duration of restriction. in particular, our policy rate decisions will continue to be based on our assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation, and the strength of monetary policy transmission. 3 / 4 bis - central bankers'speeches in any case, we stand ready to adjust all of our instruments within our mandate to ensure that inflation returns to our medium - term target and to preserve the smooth functioning of monetary policy transmission. we are now ready to take your questions. 4 / 4 bis - central bankers'speeches