##ntial measures adopted by national authorities in the countries subject to ecb banking supervision. the ecb has a " top - up " right for capital - based measures, meaning that it can impose stronger requirements beyond those any national supervisors propose. a recent episode shows that the ecb and national authorities can work in a coordinated manner. with the outbreak of covid - 19, banks supervised by the ecb were allowed to operate below the level of the pillar 2 guidance ( p2g ) capital and capital conservation buffer ( ccob ) requirements. these measures were further enhanced by the relaxation of the countercyclical capital buffer ( ccyb ) by national macroprudential authorities, and also by a relaxation of p2g for banks not under ssm supervision. such an unprecedented relaxation of capital requirements was taken to support lending and mitigate any second - round effects of the lockdown measures via the banking sector. the second set of economic policies are of course fiscal policies. in an environment of constrained policy space, it is crucial that such policies play a pronounced role in smoothing local cycles. eu fiscal rules should therefore also strive for countercyclicality at the member state level. as a reaction to the global financial crisis, all major central banks resorted to unconventional monetary policies. however, the eurozone faced a specific challenge in the interaction between the single monetary policy and the varied economic and fiscal positions of member states. this challenge was insufficiently addressed during the first decade of emu, and was revealed – and, in part, worsened – by the two crises. after the financial crisis, both monetary and fiscal policies were strongly accommodative at the aggregate level in the period 2009 - 10. however, during the 2012 - 13 recession, monetary policy offered a stimulus that was modest by historical comparison, while fiscal policy switched to discretionary consolidation to address debt overhang and debt sustainability concerns in the aftermath of the sovereign debt crisis. the analysis of the eurosystem staff during last year's monetary policy strategy review showed that the contribution of discretionary fiscal policies to eurozone core inflation, which had been around 0. 3 - 0. 4 percentage points during most of the period of emu, fell to around zero in the period 2014 - 15. the sgp aims at a countercyclical fiscal policy, but is not designed to sufficiently support monetary policy in a lower bound environment in which monetary and fiscal policies can become strategic complements rather than substitutes. 4 /

of unconventional or nonstandard monetary policy measures, which have been used for quite some time. this process began with the ecb's announcement that we would end net asset purchases under the pandemic emergency purchase programme ( pepp ) in the first quarter of 2022, and later on the app programme at the beginning of july. the exit from negative interest rates allowed us to make a transition to a meeting - by - meeting approach to interest rate decisions. the future policy rate path will continue to be data dependent. in july, the govc also announced a new instrument – the so - called transmission protection instrument ( tpi ) – with the aim to support the effective transmission of monetary policy. the tpi can be activated to counter unwarranted, disorderly market dynamics that pose a serious threat to the transmission of monetary policy across the eurozone. in the next step, it is expected that we will start discussing the reduction of the balance sheet when the normalisation of interest rates has been completed. 5 / 6 bis - central bankers'speeches there is another important issue i would like to point out. as in many other economic policies, both in europe and more broadly, we try to include the issue of the transition to a greener economy in our actions. as you probably know, we at the ecb have adopted a new strategy of monetary policy last year that also includes an emphasis on climate issues, and have adopted the so - called " ecb pledge on climate change action ". both moves indicate, in fact promise, ambitious steps to further incorporate climate change considerations into our monetary policy framework. among them are the following : tilting cspp holdings toward issuers with better climate performance through reinvestments over the coming years, limiting the share of assets issued by entities with a high carbon footprint in the counterparties'collateral pools, and implementing climaterelated disclosure requirements for collateral. let me conclude on this final point. i strongly believe that further croatian integration into the eu framework will enrich and strengthen not only croatia, but also the whole eurozone. as such, we look forward to cooperating further with you, and wish you every success in these final preparations for the adoption of the euro. 6 / 6 bis - central bankers'speeches