there are no signs of a wage - price spiral, which is important as wages are particularly relevant for services. on the contrary, average compensation per employee is slowing markedly. true, services disinflation can be slower, but not more arduous ; the last kilometer could differ in pace, but not in nature. 5 moreover, accepting that this last kilometer could naturally take longer may also provide protection against the risk of undershooting the inflation target, rather than remaining excessively tight to accelerate the process. this is why the time has come, in the euro area, to ease monetary restriction : following our governing council meeting last week, we should, barring major shocks or surprises, decide on a first rate cut at our next meeting on 6 june [ by the way, on the 80th anniversary of the d - day ]. i would then argue in favour of a policy of pragmatic and agile gradualism : there will have to be further cuts this year and next ; their pace will be guided by the data, in a genuine meeting - by - meeting approach. we do not have the same business cycle as the united states, with activity that is much less buoyant : the gradual easing of our monetary policy is therefore more evident, even though it should not be complacent. that said, we will monitor closely the geopolitical developments in the middle - east, and their possible spill - overs on energy prices. if ever these consequences happened to be lasting and propagating – i. e. affecting underlying inflation –, we would have ample room after the first rate cut to adjust the pace and the destination if needed, in the incoming monetary path : indeed, we'll anyway still be in restrictive territory for a while. iii. where could we end? is the neutral real rate ( r * ) helpful? last, where could we end? here the economic profession gets divided about the use of a concept dear to john williams, the neutral or equilibrium rate r * : the rate that balances supply and demand, and savings and investment as well. it is both an essential structural variable and a key cyclical marker : it is the dividing line between a restrictive and an accommodative monetary policy – if inflation is too high, interest rates have to go above r * to curb demand, and conversely. but the challenge is that r * is not observable and needs to be estimated : for this reason, some doubt whether the

to enhance end - user services and system performances. at the european level, we have welcomed and are supporting the proposed markets in crypto - assets ( mica ) regulation and the digital operational resilience act ( dora ), presented in september 2020 : with the publication of the mica proposal, the european union was the first g20 jurisdiction to respond to the urgent need to regulate the crypto - asset market. we also support the digital operational resilience act ( dora ). the text will create a harmonised framework for strengthening the it security of the overall financial sector. i ’ m thinking in particular of cloud players, whose role in critical segments of the sector raises the question of whether they should be located in the european union. i am hopeful that european negotiations will soon come to a conclusion on both these texts, which are crucial for regulating the financial sector. on the regulatory front, i would also like to stress the importance of the pilot regime that is to be introduced to help market infrastructure players experiment with dlt. this regime will allow multilateral trading platforms and securities settlement systems operated by csds to request temporary exemptions from existing regulations, in order to test certain dlt uses securely and with supervisory oversight. 2 / 4 bis central bankers'speeches but in order to be efficient, regulations need to be backed up by close international coordination. this is also a priority for us, to limit regulatory arbitrage or indeed avoid it altogether. for this reason, we are closely involved in the work of multilateral fora ( g7, g20, fsb, cpmi ), especially on crypto - assets and the improvement of cross - border payments. b ) however, adapting the regulatory framework does not, on its own, respond to all the challenges posed by financial digitalisation. we firmly believe, at the banque de france, that to help meet these challenges, we also need to play an active role in innovation. for us, becoming part of the european innovation ecosystem means, first and foremost, committing to helping initiatives that can create a diverse and competitive market for efficient solutions, tailored to user needs. our institutions – such as the banque de france ’ s lab, its infrastructure, innovation and payments directorate ( diip ), the acpr ’ s fintech - innovation unit, with its acpr - amf fintech forum – are fully mobilised to facilitate these initiatives and help them grow. among these initiatives, three in particular are worth highlighting