. within these constraints, we have acted to reduce financial fragmentation in two key ways. first, we have taken measures to reduce divergence between countries caused by bank funding risk. we have provided unlimited liquidity to banks in need at fixed interest rates, extending the maturity of our operations up to 3 years. we have allowed national central banks to tailor collateral rules to national conditions. and we have narrowed the interest rate corridor between the deposit rate and our main policy rate to 50 basis points, which reduces crosscountry heterogeneity in funding costs. all this was designed to support the transmission of our low interest rates more evenly across the euro area. second, we have taken measures to remove fragmentation caused by redenomination risk. this risk was affecting some countries more than others as markets feared that, if one country were to leave the euro area, a domino effect would force certain others to leave as well. according to calculations, the redenomination premium being paid by spain and italy in july 2012 was up to 2 %. and the threat this posed for future price stability was evident in the cost of deflation protection in the euro area : this rose from 198 bps in january 2012 to a peak of 270 bps in july that year. our answer to this was the outright monetary transactions ( omt ) programme. its effects have so far been powerful, not only in reducing sovereign spreads, but also in improving funding conditions for corporations, banks and individuals across the euro area. financial fragmentation has been reduced, as shown by the best summary indicator, the level of target2 balances. they have declined by 285 billion euros, or 25 %, since the peak last year. bis central bankers ’ speeches it is important to stress, however, that the benefits of lower financial fragmentation are not only being felt in struggling countries. i am aware that some of you here are concerned by the current low interest rate environment, as it reduces income for savers and squeezes returns for pension funds and insurance companies. moreover, some are rightly worried that interest rates that are too low for too long could lead to misallocation of resources and reduce incentives for governments, banks, and corporates to adjust. it is therefore worthwhile to note that the overall improvement of the situation has led to an increase in german government bond yields, which have gone up by around 25 basis points since the announcement of the omt. this demonstrates that the more ecb actions help normalise the financial

the symposium last year, we could not have foreseen that the subject would assume such importance as to attract this splendid attendance. governors will recall that we did discuss financial inclusion as far back as 2007. in truth, our choice of this aacb agenda converges with its development through the g - 20 process. many countries worldwide are actively engaged in reforms and programmes for the provision of affordable banking services, which makes the topic of our symposium particularly pertinent. the slow recovery from the global crisis forces us to revisit our growth strategies and take a closer look at their impact on the whole of the societies we are expected to serve, not just the prosperous, but also the poor and the excluded – who are showing increasing signs of impatience as they wait for the elusive magic of trickle - down to improve their lot. africa is changing fast. from the gloom and the conflict of the last decades we now have new hope and opportunity spreading across the whole continent. in some parts, it is not just a wind of change but a veritable tempest. indeed, in certain places, such is the pace of change that some fear that we are moving straight from the african spring into a wintry period of discontent. we are here, therefore, to address the issue of what can the world of banking do to push back this spectre. with 77 % of our population still having no access to formal finance, we have our work cut out for us. bis central bankers ’ speeches today, as we open our discussions on inclusive finance and banking, we must frankly admit that in an environment where only a small minority of people ever set foot in a bank, and where banking itself is hardly part of the greater political debate, we face a daunting prospect to find a pathway for promoting the best use of the capital resources available to the continent, to ensure balanced and sustainable growth with social stability, hand - in - hand with price stability, financial stability, and monetary stability. stable currencies and control of inflation figure high among pro - poor policies. to maintain our focus as central banks and to remind ourselves of the distance we still have to travel, it is sobering to note that we are reaching the time when we should embark on stage iv of the african monetary cooperation program, which reduces the annual inflation target from the current 5 % to 3 % − a bar which is too high for many of us at this juncture. the wider agenda, when the present troubles have been overcome,