don ’ t – we don ’ t – think of it like that and i don ’ t think it ’ s a good idea to frame it in that way. but let me emphasise, as you indicated, it ’ s possible to have a view of especially sovereign purchases from a philosophical point of view. it ’ s also possible to have it from a tactical point of view, as in do current conditions warrant it or not. clearly, there are individuals in either camp. maybe coming back to the chart i have shown about the ten - year rates [ chart 13 ] ) : we have seen this big move this year. interpreting the big move this year, does that mean financial conditions are easy? or does it mean there ’ s been a downward revision about future prospects for the world economy, where if we didn ’ t respond to that downbeat assessment by demonstrating our willingness, our imperative, to move policy rates in the right direction? i think that ’ s part of the intellectual debate. well, to get to that debate, if you compare the current restarting of bond purchases with the beginning of 2015, when it began, at that time the headline inflation was negative, the confronting of a compelling deflationary threat. some of the criticism would be : you ’ ve taken qe from being something for special occasions to an everyday conventional policy by doing this in response to a relatively small change of conditions. lane : let me answer first of all, the way to think about the change of conditions for me anyway. if i go back to december last year, where we ended the net app, the projected inflation rate for 2021 was at 1. 8 %. in the most recent release it ’ s 1. 5 % ; that ’ s not a minor movement. so when you have a big movement of 1. 8 % to 1. 5 %, then you have to respond. essentially, in that situation when we are in an unconventional space – the deposit rate is negative, app is an unconventional instrument – and the question is – in a world where there clearly is discussion about negative side effects from either instrument – operating at both margins from one perspective is safer and more effective than loading it all on same – the deposit rate. so i wouldn ’ t say we ’ re normalising the app because we ’ re far from a conventional environment right now. this programme now is a re - opening. it ’ s not some radical change of attitude. the conditions in which we shut the

monetary situation. i will then address the relationship between monetary policy and financial supervision. and i will close by outlining my views on the priorities for 2013 in implementing the shared longer - term vision for emu. 1. economic and monetary developments since our last meeting, the ecb has left its key interest rates unchanged : the main refinancing rate stands at 0. 75 % ; the rate on the deposit facility at 0 % ; and the rate on the marginal lending facility at 1. 50 %. bis central bankers ’ speeches on non - standard monetary policy measures, the governing council decided in december to continue conducting all refinancing operations as fixed rate tender procedures with full allotment, at least until july 2013. the medium - term outlook for economic activity remains challenging. economic activity contracted for a second consecutive quarter in the third quarter of 2012, and indicators for the fourth quarter signal further weakness, although some recent survey indicators have stabilised at low levels and financial market sentiment has improved further. domestic demand is dampened by still weak consumer and investor sentiment and the ongoing balance sheet adjustments in the banking and business sectors, which continue to weigh on investment decisions. we expect economic weakness to extend into next year with a very gradual recovery in the second half of the year. the recovery is expected to be supported by strengthening global demand, a highly accommodative monetary policy stance and significantly improved confidence in financial markets, all of which should work their way through to spending and investment decisions. annual inflation in the euro area has continued to moderate, falling from 2. 5 % in october to 2. 2 % in november. looking ahead, inflation is expected to decline further. this should support real disposable incomes. risks to the outlook for price developments are broadly balanced. inflation expectations for the euro area remain firmly in line with the governing council ’ s aim of maintaining annual inflation rates below, but close to, 2 %. our monetary analysis paints a picture consistent with price stability. looking at developments over several months, the underlying pace of monetary expansion, when accounting for special factors, remains subdued. loan dynamics are also subdued and in many parts of the euro area, credit has been contracting. this is the result of balance sheet adjustments by banks and businesses as well as the current economic weakness. 2. monetary policy and financial supervision let me now turn to the first topic chosen for our exchange of views, namely the relationship between monetary policy and financial supervision. the discussions leading to the