of england suggest, in any event, that when rates begin to rise they will do so very gradually, remaining below historical values for a lengthy period. the monetary policy of the bank of japan the differences are even more marked in the case of the bank of japan. nor can we forget that, prior to the international crisis, the japanese economy had not overcome the effects of its own domestic crisis which began in the 1990s following a substantial credit boom and a burgeoning real estate bubble. the various economic programmes implemented since have not managed to put the japanese economy back on a stable growth path, illustrating the difficulty involved in restoring normality when an economy enters a perverse cycle of deflation and contraction of activity. the latest programme – introduced and promoted by prime minister abe – included among its three pillars an ambitious monetary expansion plan which, with official interest rates close to zero, is being implemented through growth of the monetary base. although the latest data show an incipient return to positive rates of growth and inflation, evidently monetary policy in japan is still far removed from the threshold marking not only a change of cycle, but also a move towards a less expansionary stance, in contrast to the cases of the federal reserve and the bank of england. the monetary policy of the european central bank the specific characteristics of current euro area monetary circumstances stem from the complexity and depth of the crisis and the slow pace at which the euro area is emerging from bis central bankers ’ speeches the crisis in comparison with other areas. following the negative data of 2012 and 2013, the projections published by the ecb last june indicate that the euro area will not recoup precrisis levels of gdp until the end of next year. however, the recovery in employment in the euro area as a whole will not be completed in 2015. since end - 2011 the inflation rate has moved on a declining trend. it stands at an all - time low and the available projections indicate that it will remain, for the foreseeable time horizon, far from the benchmark of 2 % which, in the medium term, marks the price stability target governing the ecb ’ s actions. the scenario i described above was that encountered by the governing council of the ecb at its meeting in the first week of june and required resolute and more expansionary monetary policy action. such action was required because, although available indicators still pointed to medium - term inflation expectations remaining anchored at levels compatible with the definition of price stability, if inflation becomes en

us federal reserve has been pursuing a strongly expansionary monetary policy. in this connection it has resorted to a wide array of both conventional and less conventional measures. the federal reserve cut its official interest rates successively until placing them at their natural lower bound, i. e. close to zero, and it embarked on massive securities purchase programmes that substantially expanded its balance sheet. it also pursued a forward guidance strategy, aimed at conveying its intention to maintain monetary expansion for a prolonged period. bis central bankers ’ speeches in may last year, given the evident improvement in the economic situation, the federal reserve communicated its intention to begin tapering, or gradually reducing the intensity of its expansionary impulses through cutting its monthly volumes of securities purchases. following a period of some confusion around the month of may 2013 ( which impacted the markets to some extent ), this strategy has progressively taken root. the challenge the federal reserve faces in these circumstances is no longer that of a change in monetary tack, but how to trim its expansionary monetary stance, in line with the improvement in the economy ’ s cyclical position, without endangering economic recovery, which is still not perceived as sufficiently firm. this is a complex challenge that fuels market uncertainty and affects the margin for manoeuvre of other central banks. the monetary policy of the bank of england the situation of the bank of england is somewhat different. like the federal reserve, it also exhausted its scope for conventional measures and likewise resorted intensely to securities purchase programmes and to forward guidance. furthermore, the bank of england pioneered the implementation of measures aimed directly at boosting lending to specific sectors through its funding for lending programme. in short, this programme enabled the institutions most active in specific credit market segments to obtain financing at the central bank at a lower cost. the pick - up in economic activity in the united kingdom has been sharper than in the united states and, according to most analysts, it appears to be underpinned by sounder foundations. inflation is holding on a path consistent with the target of 2 % and it should also be borne in mind that the prices of certain assets, housing in particular, have been moving on a rising trend and have reignited debate on the role the central bank and its monetary policy should play in preventing potential bubbles. here, although the bank of england has not yet modified its accommodative monetary policy stance either, the prevailing expectations are already discounting a more or less immediate change. the latest messages from the bank