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Speaker 1: At an annual rate of ten point five percent in

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Speaker 1: January after ten percent in December. Loan dynamics continued the

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Speaker 1: path of gradual recovery observed since the beginning of two

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Speaker 1: thousand fourteen. The annual rate of change of loans to

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Speaker 1: non financial corporations increased to zero point six percent in

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Speaker 1: January two thou sixteen, up from zero point one in

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Speaker 1: December two thou fifteen. Developments in loans to enterprises continue

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Speaker 1: to reflect the lack of relationship with the business cycle,

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Speaker 1: credit risk, and the ongoing adjustment of financial and non

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Speaker 1: financial sector balance sheets. The annual growth rate of loans

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Speaker 1: two households remained stable at one point percent in January

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Speaker 1: two thousand sixteen. Overall, the monetary policy measures in place

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Speaker 1: since June two fourteen have clearly improved borrowing conditions for

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Speaker 1: firms and households, as well as credit flows across the

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Speaker 1: Euro Area. To sum up across check of the outcome

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Speaker 1: of the economic analysis with the signals coming from the

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Speaker 1: monetary analysis confirmed the need for further monetary stimulus in

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Speaker 1: order to secure a return of inflation race towards levels

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Speaker 1: that are below but close to without undue delay. Monetary

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Speaker 1: policy is focused on maintaining price stability over the medium term,

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Speaker 1: and it's accommolative stance supports economic activity. However, in order

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Speaker 1: to rip the full benefits from our monetary policy measures,

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Speaker 1: other policy areas must contribute decisively. Given continued high structural

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Speaker 1: unemployment and low potential output growth in the euro Area,

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Speaker 1: the ongoing cyclical recovery should be supported by effective structural policies.

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Speaker 1: In particular, actions to raise productivity and improve the business environment,

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Speaker 1: including the provision of an adequate public infrastructure, are vital

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Speaker 1: to increase investment and boost job creation. The swift and

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Speaker 1: effective implementation and structural reforms in an environment of accommodative

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Speaker 1: monetary policy will not only lead to higher sustainable economic

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Speaker 1: growth in the euro Area, but will also make the

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Speaker 1: EU Area more resilient to global shocks. As indicated by

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Speaker 1: the European Commission, the implementation of countries specific record mandations

34
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Speaker 1: continued to be fairly limited in two thousand fifteen. Reform

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Speaker 1: efforts thus need to be stepped up. In the majority

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Speaker 1: of EUROA countries. Phisical policies should support the economic recovery

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Speaker 1: while remaining in compliance with the fiscal rules of the

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Speaker 1: European Union. Full and consistent implementation of the Stability and

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Speaker 1: Growth Pact is crucial to maintain confidence in the fiscal framework.

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Speaker 1: At the same time, all countries should strive for a

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Speaker 1: more growth friendly composition of fiscal policies. We are now

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Speaker 1: at your disposal for questions, Mr SPA, Mr President Alexander,

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Speaker 1: especially from Bloomer News. Um, my first question is about

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Speaker 1: UM the forward guidance that you have given that rates

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Speaker 1: will be lower for a long time, also after the

46
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Speaker 1: end of asset purchases. Is the duration of the new

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Speaker 1: t t row to be looked at in this respect

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Speaker 1: and this will also extend to past the end of

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Speaker 1: your mondate if I'm not mistaken or almost. And and

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Speaker 1: my second question would be when you say lower, UM,

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Speaker 1: how low can this be? I know that this has

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Speaker 1: changed a lot in the past few years as new

53
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Speaker 1: horizons have open for monetary policy, But do you have

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Speaker 1: any idea are you approaching a limit or you still

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Speaker 1: have an envil room to go? And and that's two

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Speaker 1: casts ready, Yeah, Well on on the UM on the teltrow,

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Speaker 1: I just can give you a sort of a brief

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Speaker 1: overview of what this operation is, keeping in mind that

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Speaker 1: there's going to be a press briefing at four today

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Speaker 1: UH four today for all the further technical details that

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Speaker 1: you may may be interested now. The teltros are refinancing

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Speaker 1: operations that provide loans to banks with a long maturity,

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Speaker 1: and banks are given additional incentives to land on the

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Speaker 1: funds received. The key features of our Teltro program are

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Speaker 1: the following. We will offer four operations, one each quarter

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Speaker 1: starting June two thousand and sixteen until March two thousand seventeen.

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Speaker 1: The maturity of the operations will be four years each,

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Speaker 1: so that the last Teltro two will mature in March

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Speaker 1: two thousand twenty one. Banks will pay the mr rate

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Speaker 1: at the time of bidding, so right now is zero,

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Speaker 1: and they may even get a reduction on that rate,

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Speaker 1: which increases with the amount of loans they grant, so

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Speaker 1: the maximum reduction will bring the rate on the Teltro

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Speaker 1: two to the level of the deposit facility rate at

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Speaker 1: the time of bidding. The amount that banks can borrow

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Speaker 1: is linked to the amount of loans they have on

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Speaker 1: their balance sheet, so a bank that's very active in

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Speaker 1: granting loans to the real economy can borrow more than

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Speaker 1: a bank that concentrates on other activities. So the full

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Speaker 1: list of features is in the press release that will

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Speaker 1: be published after this press conference. So why did we

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Speaker 1: decide to have another series of teltros Well. Some of

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Speaker 1: the many reasons are long growth in the R area

84
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Speaker 1: is being recovering now for quite a time, but it's

85
00:07:22,440 --> 00:07:29,320
Speaker 1: still too low. Also, teltro too well, and we had

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Speaker 1: actually a pretty successful experience with the first tel trow.

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Speaker 1: So we expect the Teltro too will offer attractive long

88
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Speaker 1: term funding conditions to banks to further ease private sector

89
00:07:41,520 --> 00:07:45,160
Speaker 1: credit conditions and to stimulate credit creation. I think this

90
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Speaker 1: is quite important now. Also it provides funding certainty. Let's

91
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Speaker 1: not forget it's a four years operation at an attractive

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Speaker 1: price in an environment of increasing volati reality and also

93
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Speaker 1: an environment of large upcoming bond redemptions bank bond redemptions,

94
00:08:10,800 --> 00:08:16,040
Speaker 1: so banks face sizeable forthcoming funding needs. And so this

95
00:08:16,120 --> 00:08:18,560
Speaker 1: occurs in an environment where the price you know, bank

96
00:08:18,640 --> 00:08:25,080
Speaker 1: debt is volatile and uncertain. So we we think that

97
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Speaker 1: in conjunction with all the other measure standard and non

98
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Speaker 1: standard in place, this Altro two will contribute to a

99
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Speaker 1: returnal inflation rates to an objective of close but below

100
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Speaker 1: two percent over the medium term. Thank you, I'm sorry, Well,

101
00:08:52,400 --> 00:08:56,240
Speaker 1: I yes, well, that's how low can we go? That's

102
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Speaker 1: on the um. Let me say that the rates will

103
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Speaker 1: stay a low, very low for a long period of

104
00:09:04,040 --> 00:09:10,559
Speaker 1: time and well past the horizon of our purchases. From

105
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Speaker 1: today's perspective, and taken into account the support of our

106
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Speaker 1: measures to growth and inflation, we don't anticipate that it

107
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Speaker 1: will be necessary to reduce rates further. Of course, new

108
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Speaker 1: facts can change the situation and the outlook. I mean

109
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Speaker 1: also add that the experience we had with negative rates

110
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Speaker 1: in our case, at least, it's been very positive in

111
00:09:41,520 --> 00:09:46,200
Speaker 1: easing financing conditions and in the transmission of these better

112
00:09:46,280 --> 00:09:54,319
Speaker 1: financing conditions to the real economy. We're also aware that,

113
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Speaker 1: by the way here there are different views about whether

114
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Speaker 1: negative rates have a affected or how they affect the

115
00:10:01,679 --> 00:10:06,240
Speaker 1: profitability of the banking system. We can discuss this later,

116
00:10:07,520 --> 00:10:13,400
Speaker 1: but let me ask you, doesn't mean that any negative

117
00:10:13,520 --> 00:10:17,120
Speaker 1: rate will be positive, doesn't mean that we can go

118
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Speaker 1: as negative as we want without having any consequence on

119
00:10:21,400 --> 00:10:26,360
Speaker 1: the banking system. Yes, it is now, and you probably

120
00:10:26,400 --> 00:10:30,040
Speaker 1: know that we've discussed for some time the possibility of

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Speaker 1: having a tearing system, so an exemption system from for

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Speaker 1: this operation. And in the end the Going Council decided

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Speaker 1: not to exactly for the purpose of not signaling that

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Speaker 1: we can go as low as we want on this.

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Speaker 1: So the Going Council is basically, although it gives a

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Speaker 1: positive judgment about the past experience, is increasingly aware of

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Speaker 1: the complexities that this measure entails. Uh As as I

128
00:11:04,600 --> 00:11:08,720
Speaker 1: said before, we think and we have numbers. The Show

129
00:11:09,480 --> 00:11:13,520
Speaker 1: and the Vice Presidence particularly well documented on this that

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Speaker 1: the aggregate profitability