To this end, resolute action is needed to restructure, recapitalise and consolidate the banking system. To be realistic, the year 2009 will be a very difficult year. 2009 will be the year of adjustments in the balance sheets of banks, firms and private households. These adjustments should lay the foundations for economic conditions to eventually stabilise and improve.
Let me now elaborate in greater detail on where we stand in terms of economic and monetary developments in the euro area and how this has affected the conduct of monetary policy. I will subsequently talk about how we have adjusted our refinancing operations in response to the financial crisis. Finally, I will briefly discuss challenges in the resolution of the crisis.