the incoming data. both the timing and the pace will be proportionate to the evolution of the inflation outlook in relation to our price stability objective. if the evolution of the inflation outlook supported by incoming data allows a further normalisation of monetary policy, we stand ready to adjust our instruments accordingly. meanwhile, we will continue to fully reinvest the maturing securities acquired in the context of our asset purchase programmes past the date on which we start raising the key ecb interest rates. whenever we face renewed pandemic - related threats of market fragmentation that are a risk to price stability, the reinvestments that we undertake under the pepp can be adjusted flexibly across time, asset classes and jurisdictions to counter those threats. moreover, we can design and deploy new instruments to counter any threats to price stability that may emerge as we move along the path of policy normalisation. conclusion let me conclude. the scottish philosopher david hume once said that a wise person proportions their beliefs to the evidence. likewise, i think the evidence should proportion a wise person ’ s actions. this is as true for a wise monetary policymaker pursuing price stability as it is for a wise judge delivering a sound verdict, or a wise construction worker securing structural integrity. in our case, it is our evidence - based monetary policy strategy that enables us to do exactly this. and by paving the way for gradual normalisation with significant policy optionality to account for uncertainty, we are putting it into practice. we will proportion our actions to the evidence. that way, our commitment to maintain medium - term price stability remains rock - solid. 1 lenaerts, k. ( 2021 ), “ proportionality as a matrix principle promoting the effectiveness of eu law and the legitimacy of eu action ”, keynote speech at the 2021 ecb legal conference on “ continuity and change – how the challenges of today prepare the ground for tomorrow ”, 25 november. 5 / 6 bis central bankers'speeches 2 lagarde, c. ( 2022 ), “ monetary policy in an uncertain world ”, speech at “ the ecb and its watchers xxii ” conference, frankfurt am main, 17 march. 6 / 6 bis central bankers'speeches

hold at the very low level to which they had been brought in several stages since the autumn of the preceding year. some phasing - out of non - standard measures was announced. however, in may 2010, sovereign debt markets froze in various euro area member states. financial fragmentation took a new and unfamiliar form, with financial conditions and the transmission of our monetary policy varying to a great extent across member states. we responded by introducing the securities markets programme, focused on purchases of government bonds. initially, while the economic impact of the sovereign debt crisis was limited and largely confined to vulnerable economies, the rapid global recovery put upside pressure on energy prices. this drove up inflation also in the euro area. we decided to raise interest rates in bis central bankers ’ speeches early 2011 given upside risks to the medium term inflation outlook stemming from energy prices and from ample monetary liquidity. however, the sovereign debt crisis deepened and the euro area entered a second recession. the inflationary pressures that had emerged before receded. therefore, we lowered interest rates in a series of steps. stress in sovereign debt markets quickly undermined the wholesale funding conditions of banks based in those member states. to forestall a credit crunch, we introduced refinancing operations with maturities of up to three years, in a context of full liquidity allotment at a fixed rate. as the mutual exposures of banks and their sovereigns fed an adverse, self - reinforcing confidence crisis, investors started to fear that public and private liabilities issued in certain member states would not be redeemed in our common currency. a significant redenomination risk arose. as you know, the integrity of the euro area is an absolute precondition for us to be able to deliver on the mandate prescribed by the treaty and in particular to ensure a smooth transmission of our monetary policy. in order to preserve this integrity, we thus announced our readiness to conduct outright monetary transactions with the specific purpose of removing compensation for that risk from the financial pricing of securities. this announcement reversed the destabilising capital flows that redenomination fears had encouraged in spring 2012. while financial markets had been on a steady course toward normalisation for some months, in late spring and summer of 2013 the euro area money market – not unlike elsewhere in the global financial system – became subject to external shocks. we noted a sustained increase in expected interest rates. this was unwarranted in view of our underlying macroeconomic conditions, and was not in