). you are aware that lending continued this year, unlike in prior times of crisis. more so, we have seen record growth in mortgage lending, which is the point the speaker has made. for all these welcome developments, our central focus should remain with the real target, which is to make housing more available to people, and not to stage a kind of race for records. our housing market has indeed a lot of growth potential : it is true that mortgage lending has yet to become as common as it is in many other countries. however, we should bear in mind, first, that mortgage debt has been taking years to accumulate there and, second and most important, the accumulation of this debt should tally with a rise in household incomes. hence the need to prevent the emergence of a bubble in this market and the real risks this bubble would carry, in order of priority, for people, developers and banks. this sector needs a long - term development 1 / 4 bis central bankers'speeches plan based on market principles. i cannot agree more with the speaker on this subject : the government ’ s concessional lending programme indeed helped stave off market failure at times of crises. at this point in time however, we are seeing that demand for mortgage loans is in a way increasingly translating into a stampede, leading to unjustified price growth in several regions. ultimately, developers and banks stand to take advantage of this programme, rather than consumers. it would do no harm to support them ; however, our key objective is the availability of housing. we should focus increasingly on targeted support programmes, which includes the efforts to support the overall supply and demand balance. let me explain : there are more and more consumers willing to make use of low rates and take out mortgage loans. they could service the debt, but they have no money for the down payment. it is common knowledge that a mortgage loan with a low down payment is risky, which means that people might lose their homes. the banking system would in turn have to deal with more underperforming loans, ultimately leading to a rise in interest rates for all. that is why it is in our interest to stem growth in this lending segment, in line with global practices. therefore, we are discouraging banks from issuing such loans. also, a housing savings project is in the works and will hopefully gain support. this is when savings for housing become a down payment. they would be kept in a special account, with the terms of a future mortgage

features today. the assessment will shed light on bank assets and ensure that non - performing exposures are fully recognised, and prompt timely corrective action in the form of bank restructuring and capital replenishment. in turn, i expect this to help monetary policy regain traction across the euro area. actually, this for me will be a measure of the success of the exercise. why do i expect this? for banks that are found to be healthy by the assessment, the price mechanism will no longer be obscured by uncertainty about asset valuation and bank funding models. this should be reflected in higher share prices and cheaper funding costs, supporting the passthrough of our interest rates. for banks that are restructured and recapitalised, lending rates should also become more responsive to our monetary policy impulses. there will no longer be a need for such banks to rebuild capital, and hence their incentive to reduce loans that carry higher risk weights, like those to non - financial corporations, will disappear. when loans are repaid, banks can opt to lend again rather than to shrink their balance sheets. at the same time, spreads on loans should come down. funding pressures are likely to attenuate as banks reach their target loan - to - deposit ratios and as interest rates on deposits converge. and as more banks free up balance sheet space for new lending, competition among banks for borrowers should start to increase, putting further downward pressure on new lending rates. we have already seen some of these dynamics playing out in spain since mid - 2012. by identifying weaker and stronger banks, and putting a price on bank assets, the comprehensive assessment may also have a further effect : the results could present an opportunity for a revival of m & a activity, which has been very weak since the crisis, with the overall value of deals decreasing fourfold from 2008 to 2012. a rationalisation of the euro area banking sector will increase efficiency, and hence be conducive to a smoother transmission of monetary policy. in short, a strict and credible comprehensive assessment will significantly support monetary policy. insofar as it leads to bank lending rates converging between the core and the periphery, it will allow a significant additional easing of monetary policy in some jurisdictions. and insofar as it leads to better access to finance, higher growth and rising inflation, it will support our expectation that real interest rates will gradually ease over the projection horizon. one final point : looking further ahead, i expect the downsizing of the banking