How much of this business will resist the current period of stress remains an open issue, but euro area monetary statistics have shown no sign of a major decline in these money holdings so far. -  In terms of new products, the recent emergence, at least in France, of high-yield liquid deposits that are accessible via direct banking on the internet is very likely to have reduced the interest elasticity of money. Of course, monetary policy, in the euro area and elsewhere, is not committed to react mechanically to monetary developments. Nevertheless, to make the best use of the informational role of money, central banks must be able to filter out the noise that affects current monetary data, disentangling temporary factors from shifts in trends, supply shocks from demand shocks, with the latter possibly resulting from certain financial innovations in the context of globalisation. Fully assessing the effects of financial innovation is thus a real challenge for monetary analysis. Considering the practical difficulties ahead, this seems to me to offer a fruitful field for applied research. Challenges for communication in times of stress: disentangling monetary and financial stability objectives Financial market disruptions that may follow times of exuberant financial innovation may pose significant risks to macroeconomic stability. However, by their very nature and notably the highly non-linear dynamics they may trigger, such events, as well as the magnitude and speed of their macroeconomic consequences are uncertain.

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