effectively as possible under the current circumstances. at present, the ecb holds on its balance sheet approximately €35 billion worth of abss with underlying sme assets, and approximately €60 billion worth of nfc credit claims. importantly, even though the policy rate is the same for all ea member states, non - standard monetary policy measures have benefited banks in jurisdictions which have been most severely hit by the crisis. in this sense, the non - standard measures of the ecb have addressed the different funding and stress conditions of the banking system in the euro area. liquidity provisions, in particular, have helped banks to avoid disorderly deleveraging and have mitigated the decline of finance to the real economy. research evidence suggests that liquidity policies, such as the fixed - rate full allotment ( frfa ) and the longer - term refinancing operations ( ltro ), have been associated with a significant economic effect, in that the level of industrial production is 2 % higher and the unemployment rate 0. 6 % lower relative to a scenario with no such non - standard measures. 9 it also confirmed the view that, by providing ample liquidity through the frfa and the ltros, the ecb has been able, throughout the financial crisis, to reduce the costs arising to banks from restricted access to private liquidity gianone, d., lenza, m., pill, h., and l. reichlin, 2012. the ecb and the interbank market. economic journal 122, f467 – f486. bis central bankers ’ speeches funding and induce a softening of lending conditions, including to smes. this effect has been particularly strong in countries with weaker banking sectors. 10 reactions from the market so far imply that the ecb ’ s measures have contributed to alleviating stress in sovereign debt markets. the mere announcement of the omts, for example, has already helped to ease uncertainty in the system. the effect on confidence, a key factor for growth, has also been significant, and rightly so. excessive government bond spreads have gone down, corporate bond and covered bond spreads have tightened. the latest bank lending survey suggests that the announcement of the omts seems to have mitigated the adverse impact of sovereign risk on banks ’ funding substantially by enabling a number of banks to regain market access, particularly in distressed countries. these developments are very important for the prospective financing of the real economy. let me conclude. tensions in

benoit cœure : reviving credit growth in the euro area speech by mr benoit cœure, member of the executive board of the european central bank, at the paris europlace international financial forum “ growth and investment opportunities in europe ”, paris, 11 july 2013. * * * i wish to thank jean - francois jamet for his contributions to this speech. i remain solely responsible for the opinions contained herein. ladies and gentlemen, i would like first to thank paris europlace for inviting me to speak today. every year, this conference offers the opportunity to take a closer look at the challenges for the european financial sector that have been thrown up by the crisis. they come under three headings : deleveraging, fragmentation, recession. and all three are interrelated. as banks, households and governments deleverage, some economies in the euro area are being affected more than others. financial conditions across the monetary union have diverged significantly, and resulted in large cross - country dispersion in loan dynamics. financial fragmentation, uncertainty and a subdued macro environment have also manifested themselves in a contraction of investment, which is currently the most important drag on growth in the euro area. in the first quarter of 2013, investment in the euro area was 22 % below its pre - crisis level in 2007 q2. this year, the european commission expects investment to further contract by 2. 6 %, or 0. 5 % of euro area gdp. so, if the principal answer to the crisis is a return to growth, a core concern has to be how to revive credit provision in all parts of the euro area. i will today discuss in turn the role of three key factors in that respect : monetary policy, banking union and financial market structure. the role of monetary policy let me start with the role of monetary policy. throughout the crisis, the ecb has played an important role to ensure, within its price stability mandate, the proper financing of the euro area economy in a context of subdued credit dynamics. first, we have reduced our main interest rates to historic lows. we have narrowed the interest rate corridor to 50 basis points which helps reduce fragmentation between banks that rely on ecb liquidity and those that can borrow in the interbank market. and last week, unanimously, the governing council took the important step to introduce forward guidance within our two pillar monetary strategy. we expect the key interest rates to remain at present or lower levels for an extended period of time. consistently