##tain to further increases in indirect taxes, owing to the need for fiscal consolidation, and higher than expected commodity prices over the medium term. the main downside risks relate to the impact of weaker than expected growth in the euro area. the monetary analysis indicates that the underlying pace of monetary expansion remained subdued in the first four months of 2012. the annual growth rate of m3 fell to 2. 5 % in april, down from 3. 1 % in march, following strong inflows into money in the first quarter of the year. the moderation in annual m3 growth in april was mainly driven by outflows from overnight deposits belonging to non - monetary financial intermediaries ( which includes entities like central counterparties, investment funds and securitisation vehicles ). the annual growth rate of loans to the private sector ( adjusted for loan sales and securitisation ) declined to 0. 8 % in april ( from 1. 2 % in march ), owing to negative loan flows to non - monetary financial intermediaries. at the same time, monthly flows of loans to non - financial corporations and households were moderately positive in april and the annual rates of growth ( adjusted for loan sales and securitisation ) stood at 0. 7 % and 1. 5 % respectively in april, broadly unchanged from march. money and credit data up to april provide evidence that, as intended by our policy measures, an abrupt and disorderly adjustment in the balance sheets of credit institutions has not materialised. given the current cyclical situation and the ongoing adjustment in the balance sheets of households and enterprises, subdued credit demand is likely to prevail in the period ahead. looking ahead, it is essential for banks to continue to strengthen their resilience further. the soundness of banks ’ balance sheets will be a key factor in facilitating both an appropriate provision of credit to the economy and the normalisation of all funding channels. to sum up, the economic analysis indicates that price developments should remain in line with price stability over the medium term. a cross - check with the signals from the monetary analysis confirms this picture. let me now make a few remarks relating to fiscal and economic policies. significant progress has been achieved with fiscal consolidation over recent years. it is of crucial importance to continue with the efforts to restore sound fiscal positions and to regain competitiveness. these are pre - conditions for stable economic growth. as a natural complement, the implementation of the new macroeconomic surveillance framework under the eu semester is necessary.

to have been disabled. 5. the financial sector : carmen reinhart and ken rogoff ’ s book, this time is different, must have been written largely before the start of the great financial crisis. i find their evidence that a recession accompanied by a financial crisis is likely to be much more serious than an ordinary recession persuasive, but the point remains contentious. even in the case of the great recession, it is possible that the u. s. recession got a second wind when the euro - zone crisis worsened in 2011. but no one should forget the immensity of the financial crisis that the u. s. economy and the world went through following the bankruptcy of lehman brothers – and no one should forget that such things could happen again. the subsequent tightening of the financial regulatory system under the dodd - frank act was essential, and the complaints about excessive regulation and excessive demands for banks to hold capital betray at best a very short memory. we, the official sector and particularly the regulatory authorities, do have an obligation to try to minimize the regulatory and other burdens placed on the private sector by the official sector – but we have a no less important obligation to try to prevent another financial crisis. and we should also remember that the shadow banking system played an important role in the propagation of the financial crisis, and endeavor to reduce the riskiness of that system. 6. the economy and the price of oil : for some time, at least since the united states became an oil importer, it has been believed that a low price of oil is good for the economy. so when the price of oil began its descent below $ 100 a barrel, we kept looking for an oil - price - cut dividend. but that dividend has been hard to discern in the macroeconomic data. part of the reason is that as a result of the rapid expansion of the production of oil from shale, total u. s. oil production had risen rapidly, and so a larger part of the economy was adversely affected by the decline in the price of oil. another part is that investment in the equipment and structures needed for shale oil production had become an important component of aggregate u. s. investment, and that component began a rapid decline. for these reasons, although the united states has remained an oil importer, the decrease in the world price of oil had a mixed effect on u. s. gross domestic product. there is reason to believe that when the price of oil stabilizes