economic growth, the governing council is of the opposite opinion. a timely rise in interest rates will avoid the need for a larger increase in interest rates later and, hence, will contribute to stronger growth over an extended period of time. concerning the size of an increase in interest rates, against the background of a fundamentally changed situation, the precautionary interest rate reduction made in april 1999 is no longer justified. furthermore, today ’ s move by 50 basis points appeared to be the best way in which to avoid uncertainties regarding the future course of monetary policy. in addition, such a move is expected to contribute to reducing any uncertainty premia potentially prevalent in financial markets and also to help to contain a possible increase in volatility in money markets towards the end of the year. under these circumstances, the alternative of moving by less than 50 basis points now and examining the need for an additional step later on could potentially introduce unwarranted uncertainty for the period ahead. let me now provide you with more detailed information on monetary, financial and other economic developments, and thereby further explain the decisions taken today. with regard to monetary developments in the euro area, the monetary data up to september 1999 reinforced the view that m3 growth is on a rising trend. the three - month average of the annual growth rates of m3, covering the period from july to september 1999, was 5. 9 %, which is almost 1½ percentage points above the reference value of 4½ %. this deviation from the reference value has steadily increased during 1999. the strong growth of the most liquid components of m3 is particularly noteworthy, suggesting that the very low level of interest rates favoured the strong growth of monetary aggregates. the pick - up in economic activity is likely to have further stimulated m3 growth. credit to the private sector also continued to expand rapidly in september 1999, at a rate in excess of 10 %. the demand for loans remained strong throughout the first three quarters of 1999, supported in particular by the low level of bank lending rates and the ongoing economic recovery. overall, these developments indicate a generous liquidity situation in the euro area. euro area financial market developments over the past few months confirm the general change in economic conditions and perspectives for the euro area by also anticipating an acceleration of economic growth. this is reflected in the rise in government bond yields and the associated pronounced steepening of the yield curve since spring 1999. today ’ s decision should contribute to firming financial market expectations of stronger growth without increasing inflationary pressures.

use of such digital currencies. we also have to gear up on climate change – and not only because we care as citizens of this world. like digitalisation, climate change affects the context in which central banks operate. so we increasingly need to take these effects into account in central banks ’ policies and operations. the ecb has already moved in this direction. first, we are working to extend our knowledge about the economic impact of climate change and ensure that its effects are better reflected in our economic analyses, models and forecasting methods. second, through its financial stability tasks, the ecb is monitoring systemic risks stemming from climate change and the transition to a carbon - neutral economy. this work will ultimately enable us to test how well the euro area banking sector is able to withstand climate - related risks. finally, the ecb has taken steps to align its own investment decisions with the objectives of the paris agreement. in our staff pension fund, for instance, we decided to switch to a low - carbon index, and we are investigating what else we can do in our market operations. the strategy review launched by the ecb ’ s governing council last month will also take stock of how rapid digitalisation and the threat to environmental sustainability – together with globalisation and evolving financial structures – have further transformed the environment in which monetary policy operates. it will consider all aspects of the ecb ’ s policy framework. we need to reflect on how we can best deliver on the ecb ’ s price stability mandate for the benefit of all european citizens. as part of this process, we will consult the public and listen to their views, expectations and concerns with an open mind. while i have thus far focused on the ecb, it is important to recognise that digitalisation and climate change are universal developments that affect all of us in europe and worldwide. europe is uniquely positioned to master these challenges. building on common safeguards and competitive incentives, the single market offers enormous potential for economic modernisation. europe can harness this potential in its quest to design effective and affordable responses to the 2 / 3 bis central bankers'speeches challenges at hand. but an important pillar of europe ’ s response to an increasingly globalised world – economic and monetary union ( emu ) – should not be forgotten. and the role of the european parliament, as colegislator, in getting our response right cannot be understated. over recent years, the euro area ’ s architecture has evolved substantially. but essential elements are still missing