the ecb ’ s monetary policy ( even though i will not elaborate on possible upcoming measures as we are in the so - called “ quiet ” period during which members of the governing council are expected to remain silent on this issue ), the ecb ’ s accountability framework and transparency, and the progress towards building a deeper economic and monetary union ( emu ). economic and monetary developments let me first turn to economic developments in the euro area. we have seen a weakening in the euro area ’ s growth momentum over the summer and the euro area economic outlook is surrounded by a number of downside risks. also, most recent forecasts by private and public sector institutions have been revised downwards. our expectation for a moderate recovery in the next years still remains in place, reflecting our monetary policy measures, the ongoing improvements in financial conditions, and the progress made vis - a - vis structural reforms and fiscal consolidation. but the recovery will likely be dampened by high unemployment, sizeable unutilised capacity, and the necessary balance sheet adjustments. bis central bankers ’ speeches inflation in the euro area remains very low, standing at 0. 4 % in october. in the light of the recent sharp fall in oil prices, and taking into account prevailing futures prices for energy, inflation is expected to remain at around current low levels over the coming months, before increasing gradually during 2015 and 2016. meanwhile, we are facing continuously sluggish money and credit dynamics – even if the growth rates of some key aggregates have edged up in recent months. monetary policy in crisis times during the past crisis years, the ecb has acted forcefully to safeguard price stability and to contribute to financial stability in the euro area as a whole. in particular, we have taken several non - standard measures to ensure the transmission of our monetary policy to the economy. we provided the euro area banking system with unprecedented funding, including the full allotment – at fixed rates – of banks ’ demand for liquidity. we also communicated our readiness to undertake outright monetary transactions with a view towards restoring the monetary transmission mechanism which was impaired by distress in sovereign bond markets. while these measures have been successful in improving banks ’ access to private credit and countering financial fragmentation, broader financing conditions – foremost the cost of borrowing from banks – have been exceptionally sluggish in responding to the monetary policy accommodation that was introduced. as a consequence, monetary and credit dynamics have followed a protracted, negative trend until very recently. against this backdrop, and in view

of a persistently weak inflation outlook, we decided in june and then in september to adopt a number of monetary policy measures. with these monetary policy decisions, we have moved from a monetary policy framework based predominantly on passive provision of liquidity to a more active and controlled management of our balance sheet. in september, we cut the key ecb interest rates to their lower bound. the main refinancing rate now stands at 0. 05 %, and the deposit facility rate at – 0. 20 %. we also announced further measures to support lending and materially ease credit conditions for households and non - financial businesses. these measures include the targeted longer - term refinancing operations ( tltros ), which we started to implement in september. these operations allow banks to borrow from the eurosystem at very attractive conditions over a period of up to four years, provided that they meet certain conditions regarding their lending to the private non - financial sector ( excluding loans to households for house purchases ). moreover, last week we started to purchase simple and transparent asset - backed securities under our abs purchase programme ( abspp ). purchases will be restricted to senior and – down the line – guaranteed mezzanine tranches. due to the stringent quality criteria for eligibility demanded of the underlying loans, and the considerable amount of credit enhancement which is built into the securitisations qualifying for the programme, the additional risk exposure which the eurosystem will acquire under the abspp will remain limited. we have also already started purchasing covered bonds issued by euro area banks under our new covered bond purchase programme ( cbpp3 ). these measures will enhance the transmission of monetary policy, support the provision of credit to the euro area economy and, as a result, ease our monetary policy stance more broadly. they will also have a sizeable impact on our balance sheet, which we expect to move towards its early 2012 dimension. this will ensure the necessary degree of monetary accommodation which will effectively contribute to a gradual recovery and a return of inflation to levels closer to our aim of below, but close to, 2 %. bis central bankers ’ speeches we already have indications that this credit easing package is delivering tangible benefits, but time is needed for the positive effects to fully materialise. however, should it become necessary to further address risks of too prolonged a period of low inflation, the governing council is unanimous in its commitment to using additional unconventional instruments within its mandate. in this context, we have also tasked relevant ec