00:00Interest rates have moved away from the effective lower bound,
00:03driven in part by structural pressures that include, in particular,
00:08in this part of the world, rising defence spending.
00:12And the shocks of this era are more likely to fall on the supply side than on the demand side.
00:18Because these negative supply shocks have tended to push prices upwards,
00:23interest rates have moved away from the effective lower bound.
00:28But the shift also reflects, perhaps more fundamentally,
00:32the policy framework Europe has built in response to these crises.
00:37By making the economy more resilient to shocks,
00:40this framework has reduced the need for unconventional or forceful policy responses.
00:46Those of you veterans of the great financial crisis and the sovereign debt crisis will remember
00:54monetary policy is the only game in town.
00:57I don't think we've heard that so often recently, and I hope we don't.
01:04The ECB's own instruments have reduced fragmentation risks,
01:08including the transmission protection instrument, often referred to as TPI.
01:15These tools make it less likely that we observe unwarranted movement in sovereign spread.
01:21They also mean that we can raise rates to address inflation without the concern that tightening itself
01:27becomes a source of financial stress.
01:31In addition, the strengthening of the European institutional architecture has weakened fragmentation
01:36by tackling, not to perfection, but by tackling the bank sovereign nexus from both sides.
01:45European banking supervision, and I salute the supervisors in this room,
01:49and the European resolution framework have made the banking sector more resilient in Europe,
01:55so that shocks are less easily amplified by the banking system.
01:59But we need to remain mindful that financial stability challenges may be building
02:04in non-bank financial intermediation, where oversight has not kept pace.
02:10Deep towards the website again, the knife of http foot alsohao daaaa zaaaa zaeta,
02:10and in theņem sahacıTA.
02:10Easel?
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