crisis. he emphasises, “ but communication – no matter how clear – only works if the communicator is credible. the ecb has a track record of following up words with deeds, and we intend to maintain it. ” * * * ladies and gentlemen, the last ‘ ’ ecb and its watchers ’ ’ conference took place in june 2012. on that occasion i talked about heterogeneity across euro area countries, which was indeed a burning issue at that time, when fractures were running along national borders within the euro area and the integrity of the euro area itself was threatened. today, almost two years on, the situation has improved distinctly. markets are slowly but consistently re - integrating. production and i would like to thank arthur saint - guilhem and spyros andreopoulos for their contribution in the preparation of this speech. bis central bankers ’ speeches incomes are growing again and growth is spreading visibly to the most stressed parts of our union. and our union has expanded in the meantime, a sign that the euro project remains an anchor for the future of many europeans once on the outskirts of the continent. but the necessary institutional transition – which is re - shaping and reinforcing the architecture of monetary union – is still proceeding. the central bank has been accomplishing its objective in a weak institutional environment, which did not facilitate its task. the monetary union is composed of 18 independent states, with important internal imbalances and with different historical backgrounds which shape their diverse policy priorities. for some, a central bank managing the aftermath of the great contraction is doing too little. for other, we are too bold and experimental. our policy aim is clearly price stability for the euro area as a whole. several times over the past years we have been confronted with economic and financial developments that had the potential, if not addressed forcefully, to compromise price stability for the euro area as a whole. we had to act, to take decisions, and to communicate these decisions to the public in a clear and coherent manner. in doing so we were not alone, as several central banks have used communication more intensively as an instrument of crisis control. monetary policy communication is never easy : one has to find the right vocabulary to communicate to a wide audience notions and content that are not immediately intuitive but highly relevant for the lives of many people. monetary policy communication to a community of peoples as diverse as the euro area ’ s is even more challenging. this will be the subject of my thoughts today

may 2013 we announced that we would extend the minimum horizon for this procedure until july 2014 ; in november 2013, this was further extended for as long as necessary, and at least until july 2015. this form of forward reassurance provided banks with some certainty about their eurosystem funding for as long as necessary, and therefore especially in conditions of renewed turbulence. this reassurance has also helped ease concerns about the expiration of the two three - year operations. a third occasion when communication mattered was during last summer, when we were facing pronounced volatility in the money market forward curve which threatened to undermine our accommodative monetary policy stance. we succeeded in narrowing down market expectations regarding the path of our instruments. in other words, we clarified our reaction function by including forward guidance in our communication. more precisely, on 4 july 2013 the governing council stated that it expected “ the key ecb interest rates to remain at present or lower levels for an extended period of time ”. this qualitative statement about the likely evolution of policy interest rates was complemented by a narrative describing the macroeconomic conditions on which this guidance was based and which would effectively determine the length of the “ extended period ”. more precisely, the governing council explained that its expectation was based on “ the overall subdued outlook for inflation extending into the medium term, given the broad - based weakness of the economy and subdued monetary dynamics ”. this conditionality of the guidance ensures full consistency with the ecb ’ s strategy and mandate and thus ultimately guarantees its credibility. note a difference between our approach to verbal communication regarding the conditional path of our instrument and the approach taken by other central banks. our main motivation was to regain control of the short - term segment of the money market in conditions in which that market was being influenced by expectations and external factors that we considered misaligned with our monetary policy inclinations. in other words, the stance of policy was considered appropriate, given the outlook for price stability prevailing at the time. but the way the stance was reflected in market prices had become subject to shocks that we wanted to minimise. unlike other central banks, we had not reached the lower bound and the intention bis central bankers ’ speeches was not to inject further doses of monetary stimulus. we wanted to prevent the stimulus that had been introduced from being removed by excess market price volatility. but that was not all : let me stress that we have followed up words with actions. in line with the governing council ’