statistics. these statistics are part of the national accounts and provide, in principle, a good framework for international comparison of financial data. however, us data depart from the national accounts standards in some areas which makes them not fully comparable ; for instance, the us household sector is narrower than in the other economies. 3 to some extent, the data can be adapted to make them more comparable : in the slide, the us data on income have been adjusted to better conform to the other two economies ’ income data. 4 for the us, the headline figure is the “ all items consumer price index for all urban consumers ( cpi - u ) ” reported by the bureau of labor statistics, whereas the “ general consumer price index ” in japan is defined by the japan statistics bureau. other differences include for instance the coverage of households : whereas the hicp includes the rural population in its scope, the us cpi only covers urban population. in the euro area and the uk, sole proprietorship and partnership without independent legal status are included in the households sector, but they are included in the non - financial corporations in the us. subtracting interest paid from the us measure of income, inter alia. these caveats notwithstanding, there is a remarkable difference in household debt levels. the greater home ownership in the us and the uk compared with the euro area due to a more developed mortgage market has certainly contributed significantly to the higher levels of household debt in these countries. this chart illustrates a comparison of total household wealth. in this context, it is my pleasure to announce that the ecb will publish for the first time quarterly data on household wealth in the next statistical press release “ euro area financial and non - financial developments ” to be issued on 28 october 2010. the proportion of financial wealth to total wealth is much higher in the us, mainly because of the higher weight of private pension schemes, and it is also more volatile, owing to the higher weight of equity assets in total wealth. the large drop in equity prices and house prices in some countries and in residential investment is reflected in a pronounced decline in the ratio of wealth to disposable income, particularly so in the u. s. moreover, in the us, the gap between total wealth and financial wealth has narrowed substantially. i will turn now from a typical lender, the household sector, to the typical borrower, the nonfinancial corporations ’ sector. the main difference between the euro area and the us is the weight of bank financing. in

monetary developments continue to be fostered by portfolio shifts, reflecting a sustained preference on the part of investors for liquid and secure assets in an environment of high uncertainty. however, the low level of interest rates has also contributed to strong monetary growth. when interpreting monetary trends, particular account needs to be taken of the portfolio shifts towards increased demand for monetary assets for precautionary reasons. the reduction in geopolitical tensions should support an unwinding of these portfolio shifts. a reversal in monetary trends would in any case dampen the concerns regarding the medium to long - term implications of recent monetary dynamics. as a consequence, monetary developments will continue to be monitored closely. overall, it currently appears that inflation rates should decline to below 2 % over the medium term, in particular given the outlook for economic activity and the significant appreciation of the euro. it also appears that the strong expansion of m3 should not adversely affect this outlook, as portfolio shifts have played a prominent role ; in particular, the build up of liquidity should not translate into inflationary pressure as long as economic growth remains modest. hence, cross - checking the information from the two pillars leads us to conclude that the risks to price stability over the medium term remain limited. regarding fiscal policy, developments in 2002 were generally not satisfactory. in particular, countries that had not achieved sound fiscal positions in earlier years when the economic conditions were more favourable are now struggling to keep their budgets under control. looking ahead, it is crucial to underpin the fiscal policy framework with decisive action, strong peer pressure and consistent implementation of the rules of the treaty and of the stability and growth pact. countries should maintain budgetary positions close to balance or in surplus over the cycle, and, where this is not yet the case, take the required structural consolidation measures. this also creates the necessary room for the operation of automatic stabilisers. at the same time, governments are advised to place the emphasis on growth - oriented consolidation policies that strengthen the productive forces of the economy. by strengthening confidence, a credible medium - term fiscal consolidation strategy will also support economic growth in the short term. finally, structural reforms are essential to increase the euro area ’ s growth potential and enhance its ability to better withstand external shocks. indeed, such reforms, which should aim to reduce rigidities in labour and goods markets, could significantly strengthen the degree of resilience of economic activity to such shocks, both in the euro area as a whole and in its regions. renewed momentum in the process