. when making a comparison with the measures of other central banks, people often forget that monetary policy measures, including unconventional ones, have to be adapted to the institutional conditions, economic specifics and financing structure which make up a currency area. measures which are appropriate in one currency area can be ineffective elsewhere. what seems like the first option in one place can be the very last resort elsewhere, without the actual aim of the measures having to differ much from one another. instead, we should ask : would such purchases have the desired effect on the rate of inflation? what “ quantities ” would need to be purchased to have an effect? how long would such effects last? the euro area is characterised by a bank - based financial system which makes it considerably different from more strongly market - based financial systems, particularly in the united kingdom and the united states. this explains our focus on refinancing operations, which have enabled the banking system to overcome liquidity bottlenecks, maintain credit relationships and enter new credit arrangements. our measures from june and september 2014 also serve to support the credit channel. in essence, it is about improving funding bis central bankers ’ speeches conditions for borrowers in the real economy. the same logic can also be applied to the selective purchase programmes for covered bonds and asset - backed securities. the eurosystem is currently faced with 18, soon to be 19, issuers of government securities. should we not take into account during a broad purchase programme of securities the fact that government securities in the euro area are not without credit risk? there are very few shared competencies in fiscal policy. as long as this is the case, the ecb ’ s purchase of government securities is inevitably linked to a serious incentive problem. after all, the required cost - benefit considerations should also take into account the fact that other central banks bought government securities in a different economic environment with considerably higher long - term interest rates. in the euro area, the long - term interest rates on spanish and italian government bonds, for example, are already lower than those from the united states or the united kingdom. it is therefore questionable whether we should “ depress ” interest rates for the securities class even further. moreover, the interest on national government bonds in the euro area doesn ’ t operate as a benchmark for all further refinancing operations, as is the case in the united kingdom or the united states for example. besides, the effect of intervening in capital markets in a bankbased financial system is weaker

path of inflation, even if there is room for discussion about the some of the measures and their design. the list of our crisis management measures is long. in june and september this year we lowered key interest rates further. the main refinancing rate is now just 5 basis points. the interest rate channel has thus been exhausted. for the first time in our history we have resorted to a negative deposit rate in an effort to achieve the desired monetary policy accommodation within the tried and tested corridor system. this justified monetary policy step – which favours investment – was not an easy decision for us, not least because of its possible side effects for the financial sector and for savers. at the same time, we have the tool of forward guidance, which we have used and later reaffirmed : with regard to the inflation outlook, based on current data we expect that the central bank interest rates in the euro area will remain at the current level for an extended period. in addition we have taken a number of targeted unconventional measures which should improve the monetary policy transmission mechanism. one of these is targeted longer - term refinancing operations ( tltros ), with which banks can obtain liquidity for a fixed interest rate for up to four years. we have drafted two purchase programmes, one for covered bonds and one for asset - backed securities ( abs ). the purchase programme for covered bonds started in october. so far purchases of around €16 billion have taken place. we started the abs programme just last week. i anticipate that together the longer - term refinancing operations and both purchase programmes will have a strong impact on the balance sheet of the eurosystem. innovation or imitation every month there are fresh calls for further measures. but is it appropriate to contemplate further measures at this moment in time? under normal conditions, central banks are in a position to ensure price stability in an environment of positive nominal interest rates by means of conventional interest rate policy. once interest rates are at zero, a central bank is left with only unconventional measures in order to fulfil its mandate. central banks all over the world have indeed been anything but idle. in particular they have significantly expanded their balance sheets, and by making changes in their balance sheet structure they have taken various measures to make targeted investments in submarkets affected by liquidity shortfalls, maintain important credit relationships and ensure a functioning monetary policy transmission. bis central bankers ’ speeches we, too, have turned to innovative measures