supporting the normalisation of price stability, as well as the ongoing economic recovery. i am confident that full implementation of the private and public sector asset purchase programmes, as announced, will lead to a sustained return of inflation rates towards levels consistent with our definition of price stability, underpinning the firm anchoring of medium to long - term inflation expectations. as always, the governing council stands ready to use all the instruments available within its mandate to respond to any material change to the outlook for price stability. references bhattarai, s., eggertsson, g. b. and gafarov, b., “ time consistency and the duration of government debt : a signalling theory of quantitative easing ”, unpublished manuscript, 2014. curdia, v. and woodford, m., “ the central bank balance sheet as an instrument of monetary policy ”, journal of monetary economics, 2011. del negro, m., eggertsson, g. b., ferrero, a. and kiyotaki, n., “ the great escape? a quantitative evaluation of the fed ’ s liquidity facilities ”, frb ny staff report 520, 2011. eggertsson, g. and woodford, m., “ the zero bound on interest rates and optimal monetary policy ”, brookings papers on economic activity, 2002. gertler, m. and karadi, p., “ qe1 vs. 2 vs. 3 : a framework for analyzing large - scale asset purchases as a monetary policy tool ”, international journal of central banking, 2013. bis central bankers ’ speeches vayanos, d. and vila, j. l., “ a preferred - habitat model of the term structure of interest rates ”, nber working paper 15487, 2009. wessel, d. ( ed. ), central banking after the great recession : lessons learned and challenges ahead, brookings institution, 2014. bis central bankers ’ speeches

in broader credit conditions since the introduction of our new non - standard measures. the survey, addressed to the senior loan officers of a representative sample of euro area banks, provides information on financing conditions in euro area credit markets and on banks ’ lending policies. the left - hand chart in figure 4 shows that banks have consistently eased their credit standards for loans to non - financial corporations over the past year. the easing of credit standards stems, notably, from the lower cost of funds and balance sheet constraints, as well as from greater competition among banks. both developments were clearly objectives of our measures, in particular of the tltros. the right - hand chart in figure 4 shows net credit demand conditions and their contributing factors. easier access to credit has been coupled with a consistent increase in firms ’ demand for loans. the general level of interest rates, according to the survey respondents, is contributing most to the recovery in loan demand. as i have already mentioned, an important transmission channel for asset purchases relates to the fact that different assets are imperfect substitutes. consequently, interventions by the central bank that affect the supply of various assets available to private investors influence the prices of many other assets, including investment grade bonds, equities, real estate and foreign assets, with consequences for the exchange rate. figure 5 shows the increase in equity and bond prices ( the latter illustrated by investment grade corporate bond yields ). bis central bankers ’ speeches figure 5 the ongoing deterioration of long - term inflation expectations was a major factor in the extension of our purchase programme in january this year. figure 6 shows the evolution of these expectations over the past decade and since 2012. euro area longer - term inflation expectations ( both market - based and, to a lesser extent, survey - based ) had been falling since early 2013, reaching an all - time low by early 2015. figure 6 bis central bankers ’ speeches expectations of inflation five years ahead, as expressed in the ecb survey of professional forecasters, fell from 1. 98 % in the first quarter of 2013 to 1. 77 % in the first quarter of 2015. the five - year inflation - linked swap rate five years ahead fell from 2. 4 % to 1. 5 % over the same period. since january 2015 this declining trend has been reversed. both market - based and survey - based measures of longer - term inflation expectations have recovered from their lows. while broadly similar dynamics in market - based measures of longer - term inflation expectations have been observed in other countries, the decline