terms of investment in this area. dear colleagues, the new reality has also led to tectonic shifts in the eu economic policy. 3 / 4 bis central bankers'speeches the creation of the eu recovery fund is a historic step towards european economic integration and financial solidarity. the fund earmarks nearly €2. 5 billion in grants for lithuania. the resources of the fund will be distributed in the light of the objectives elevated in europe to the top political level : digitalisation and the green deal. the creation of the fund also implies a historic opportunity for us. targeted use of the fund ’ s resources will not only let us contribute to the european cause. the objectives set by europe provide a good compass if we want to lay a new foundation for a more rapid long - term growth of lithuania ’ s economy. that is why i mentioned in the beginning of my speech that the issue of investment and innovation is, indeed, timely. we are witnessing structural changes and new plans for investment that can alter the reality of our economic life for decades ahead. today ’ s discussion has brought together a large number of competent professionals from lithuania and abroad. i believe that our conversation can provide an impetus to make better use of the emerging opportunities. lithuania, meanwhile, begins a new political cycle and, perhaps, some of the ideas that will be put forward will resonate with decision makers. thank you for your attention and i wish you a meaningful discussion. 4 / 4 bis central bankers'speeches

firm conviction that macroprudential policy is an effective tool in curbing systemic risk. let me go back here once again to the lessons of the great recession. it showed us that microprudential regulation and supervision alone are not enough to safeguard the financial system. it became evident that boom - and - bust cycles in asset prices required additional instruments. the crisis was therefore a catalyst for the rise of macroprudential policies – including in lithuania, which was hit particularly hard by the boom - and - bust cycle. house prices dropped sharply, by 30 % in 2009, which was the second worst drop in the entire eu. the housing market crash went hand - in - hand with the broad - based economic downturn – the crisis wiped out almost 15 % of lithuania ’ s output that same year. i think the magnitude of the shock made us learn our lesson. in post - crisis years, lithuania has been eager to find an effective combination of macroprudential policy measures. in 2011, we were among the first in the eu to introduce responsible lending regulations and establish restrictions on lending standards for housing loans, namely loan - to - value, debt - service - toincome, and loan maturity. moreover, macroprudential capital buffers were introduced as soon as they became available in the european regulation from 2015. to prepare against potential shocks in the future, the counter - cyclical capital buffer rate in lithuania had been raised up to 0. 5 % in 2017 and to 1 % in 2018. all combined, lithuania features one of the most comprehensive sets of macroprudential policy measures in the eu. this makes us a very good case to examine – in practice – the effectiveness of the macroprudential policy framework under extreme covid - 19 conditions. prior to this year, critics would say that our macroprudential set - up was perhaps too wideranging and excessive. but this crisis showed, i believe, that our policy stance was the right one. crucially, it helped prevent a deterioration of lending standards and the build - up of systemic risk in the run up to the covid - 19 shock. the stock of loans to households and house prices were growing in line with gdp and household income. this contributed to the decrease in the nonperforming loan ratio – from as much as 20 % in 2010 to only 1. 7 % in the first quarter of 2020. banks were making profit while maintaining solid capital buffers. as a result