will be uneven across the various euro area countries, aside from the fact that the general government fiscal position is also very different. therefore, retaining the pepp ’ s flexibility is essential to head off problems of financial fragmentation that hinder the transmission of our monetary policy. in addition to the pepp, another instrument that may be recalibrated in the near term are our tltros. this programme provides banks with funding under particularly advantageous conditions, provided that they achieve certain goals in terms of lending to firms and households ( the latter excluding loans for house purchase ). the programme was made more attractive still to banks at the outbreak of the pandemic, allowing them to obtain funding at an interest rate that could temporarily be as low as - 1 %, on the condition that they do not reduce their volume of eligible lending in light of the pandemic crisis. these revised terms and conditions have been a success : in the june tltro iii operation, participating banks received a total of €1. 31 trillion, an all - time high for the eurosystem ’ s refinancing operations. more importantly, the evidence available suggests that banks have indeed used the financing received to lend to the real economy. in conclusion, in the face of a deteriorating outlook for activity and inflation, the ecb governing council must increase monetary accommodation and head off problems of fragmentation in the transmission of monetary policy, primarily through the instruments that have proved most effective during this crisis. the ecb's strategy review in the second part of my address i will take a longer - term perspective and reflect on the changes occurring in the implementation of monetary policy in the advanced economies, which have led the ecb, like other central banks, to review its strategy. in the years prior to the 2007 – 2012 crisis, which in our case coincided with the early years of the ecb, a certain consensus emerged among the advanced economies regarding the role and functioning of central banks. these were designed as independent entities, that is, not subject to direct control by governments, with a clear mandate to ensure price stability, in addition to full employment in some jurisdictions, such as the united states. the price stability mandate is normally expressed as a numerical inflation target, frequently 2 % or, as in the case of the ecb, a rate below, but close to, 2 %. to achieve its price stability target, the central bank adjusts the general level of interest rates on the funding raised – via bank loans

the current account : • trade view, • savings / investment view, • asset view. trade view : cyclical and growth asymmetries between economic regions worldwide have contributed to the emergence of global imbalances. however, trade - related factors cannot explain the magnitude of the imbalances observed. 2 / 7 savings / investment view i : global imbalances largely reflect low savings in the us ( fiscal and private ). the gloomy side of this perspective emphasises the widening fiscal deficits in the us and / or bubbledriven wealth effects in private consumption ( housing market ). the benign perspective focuses on a wealth effect rooted in higher us trend productivity growth resulting in higher risk - adjusted returns on us assets and correspondingly strengthened demand for us assets by foreigners. savings / investment view ii : imbalances reflect structural changes in savings and investment patterns in other parts of the world. the most prominent advocate of the global savings glut hypothesis is the chairman - designate of the federal reserve, ben bernanke. trade and asset view : imbalances reflect more or less stable policy incentives – export - led growth strategies in asia and reserve accumulation in the aftermath of the asian crisis ( bretton woods ii hypothesis ). asset view : globalisation of financial markets reduces home bias and increases room for manoeuvre for financing of current account deficits. this position has been defended most prominently by the current chairman of the us federal reserve, alan greenspan. but let us be clear : such isolated explanations may be helpful in highlighting certain aspects, but it should not be forgotten that, for a highly endogenous variable like the current account, the fundamental causes of the deficit affect goods and capital markets and a wide range of asset prices simultaneously. to quote roger w ferguson jr on this ( 2005 ) : “ but any compelling explanation of the current account deficit must identify not merely the proximate influences on the deficit – be they exchange rates, capital flows, or aggregate saving and investment – but also the fundamental, underlying sources of the imbalance ”. i do not want do go more deeply into the specific empirics of the us current account. suffice it to say that, in my view, all these causes can explain certain parts of the us current account deficit – albeit at varying levels of importance : productivity increases generally prove to be significant explanatory variables for current account changes. in general, empirical studies do not find much support for fiscal deficits