national level, independent budget offices would ensure reliable forecasts – a prerequisite for sound planning and implementation of budgets. at the euro area level this needs to be complemented by an independent entity with a clear mandate and a strong institutional framework to assess the implementation of fiscal rules. for instance, this could be called a european budget office or “ ebo ”, which could potentially form the nucleus of what might become over time, and in a gradual manner, a european ministry of finance. strong and independent institutions at the euro area and national levels serve to enhance transparency. they bring the necessary pressure to bear to ensure the conduct of sound policies and effectively counteract possible tendencies towards a lenient implementation of fiscal rules at the level of individual member states. in addition to the “ six - pack ” adopted in march 2011 the heads of state or government of the euro area also agreed on a “ euro plus pact ” to strengthen policy coordination with the aim of improving competitiveness and convergence. under this agreement euro area governments commit to use a set of common indicators to regularly monitor each others progress in areas such as labour - market reforms, reforms to wage - setting arrangements and reforms aimed at improving the sustainability of pension, health care and social benefit systems. governments who signed the euro plus pact also committed to translate the rules set out in the stability and growth pact into their national legislations. the reform of article 135 of the spanish constitution in august 2011, which for the first time introduced the principle of budgetary stability into the fundamental law of the country, is a positive example of recent progress made in this area. as a final remark, let me emphasise once again that mastering the current crisis situation requires that all parties involved honour their previous commitments. most notably, governments need to ensure, under any circumstances, the achievement of announced fiscal targets and deliver the envisaged institutional and structural reform programmes. this is of utmost importance for improving market confidence and regaining macroeconomic and financial stability in the euro area. thank you for your attention. bis central bankers ’ speeches

in view of the uncertainty surrounding the impact of the pandemic. the economic downturn has also adversely affected inflation dynamics. as foreseen in our baseline scenario, headline inflation has been declining over the last few months. it turned negative in august and fell further, to – 0. 3 %, in september, dampened by weak demand and the previous collapse in oil prices, but also by temporary factors. our projections foresee headline inflation remaining negative into early next year, and coming in at 0. 3 % on average in 2020. looking further ahead, we expect headline inflation to rise gradually, to 1. 0 % in 2021 and 1. 3 % in 2022. ample economic slack, low energy prices and the recent appreciation of the euro are expected to continue to weigh on the inflation outlook. our monetary policy response to the pandemic shock to counter the effects of the pandemic shock as expected in our baseline scenario, we have adopted a package of appropriate, proportionate and complementary measures. these measures are showing their effect and aim to safeguard medium - term price 1 / 3 bis central bankers'speeches stability. these measures have reinforced the monetary accommodation that was already in place before the pandemic. in terms of policy tools, our response to the pandemic has been structured along two key axes : lending operations and asset purchases. notably, we have provided banks with access to central bank liquidity on generous terms, and over long maturities, to help them continue to provide credit. to this end, our longer - term liquidity refinancing operations have played a key role in supporting the bank lending channel and thereby the smooth and even transmission of our monetary policy. in particular, our targeted longer - term refinancing operations ( tltro iii ) have supported the supply of credit during the pandemic. this has been particularly relevant as pandemic - related falls in revenues have forced firms to take on additional debt to finance working capital and other requirements. as a result, credit growth has been substantial, and not only in comparison to other historical crisis periods. this credit growth accommodated firms ’ liquidity needs and supported their ongoing activities, but we have also seen a rise in financial asset and real estate prices. the annual growth rate of loans to firms stood at 7. 1 % in august, 4. 1 percentage points higher than in february. our tltro iii programme has seen a sizeable takeup by banks, with a combined