of m & as ) and, more generally, allows a better allocation of savings and sharing of risks. as a consequence, the euro is becoming extremely attractive, as a vehicle, a transaction, an investment and a reserve currency. as you may know, as central bankers, we remain neutral as far as the internationalisation of the euro is concerned. we are neither encouraging, nor discouraging the process. but, as a french and european citizen, i cannot help and feel proud of having one the two main currencies in the world. in sum, benefits of the euro include a high degree of credibility of monetary policy reflected in the level of long - term interest rates ; diminished exchange rate volatility ; completion of the single market and encouragement to cross - border trade. none of this, of course, can be taken for granted. benign conditions currently prevailing on financial markets can be reversed. shocks may be coming, which would impact negatively european economies. despite some signs of cooling, imbalances are still building up, especially in the housing sector, fuelled by a dynamic expansion of credit, although in no way comparable to those in some other developed economies. but i have the strong conviction that we are fully equipped to deal with any contingency, and, provided the necessary structural reforms are undertaken, keep the economy on a path of growth and stability. 2 ) how have those successes been achieved? a lot comes, in my view, from the institutional and operational framework in which monetary policy is developed and implemented. the independence of the ecb and of the 13 participating ncbs is enshrined in the treaty. they are institutionally, operationally and financially independent from european community institutions and national governments. we have a clear and transparent definition of price stability : inflation below but close to 2 % over the medium - term. the monetary policy framework of the eurosystem is “ medium - term ” oriented. it rests on a two - pillar approach : on the one hand the economic analysis examines cyclical, economic and financial indicators related to the main determinants of short - term inflation ; on the other hand the " monetary analysis " looks at the behaviour of money and credit aggregates and provides a perspective on longer - term inflation. cross - checking the outcome of the economic analysis – broadening growth in the euro area – with the monetary analysis – ample liquidity and strong monetary growth – supports the assessment of risks over the medium to long - term horizon, which

saw inflation halve again to 2. 6 % in june when we started lowering interest rates. the new data available at the time of the september governing council meeting reinforced our confidence in the timely return of inflation to our 2 % target. we therefore lowered the rate on the deposit facility, which is the rate through which we steer the monetary policy stance, by another 25 basis points to 3. 5 %. we are determined to ensure that inflation returns to our 2 % medium - term target in a timely manner. we will continue to follow a data - dependent approach to determining the 2 / 5 bis - central bankers'speeches appropriate level and duration of restriction, focusing on the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission. policy rates will be kept sufficiently restrictive for as long as necessary to achieve our aim. we are not pre - committing to a particular rate path. moreover, as we announced on 13 march 2024, some changes to the operational framework for implementing monetary policy took effect from 18 september. 1 in particular, the spread between the interest rate on the main refinancing operations and the deposit facility rate was set at 15 basis points. the aim is to steer short - term money market rates more closely in line with monetary policy decisions. in parallel to our policy deliberations, we have also launched an assessment of our monetary policy strategy. this assessment will be more limited in scope than our last review, which we completed in july 2021, and will include two work streams. one work stream will focus on the changed inflation environment and the other on the implications for our monetary policy strategy, including what we can learn from the periods of both low and high inflation. we expect to conclude the assessment in the second half of 2025 and i intend to keep you informed in our regular hearings and interactions. advancing capital markets union let me now turn to the second topic of this hearing – the capital markets union. the ecb has long emphasised the need for progress in this area to integrate our fragmented markets and thus foster risk diversification and shock absorption across the eu. doing so would support financial stability and facilitate the transmission of monetary policy. but a deep and integrated single market for capital is also essential for achieving some of the eu's other key goals, from financing the green and digital transitions to enabling savers to earn higher returns. additionally, young and innovative firms need to grow and become more productive, which will ultimately benefit all europeans. for the time being