stemming from the impact of past energy and food price increases on price and wage - setting behaviour must be avoided. the governing council is monitoring price - setting behaviour and wage negotiations in the euro area with particular attention. we have repeatedly expressed our concern about the existence of schemes in which nominal wages are indexed to consumer prices. such schemes involve the risk of upward shocks in inflation leading to a wage - price spiral, which would be detrimental to employment and competitiveness in the countries concerned. the governing council calls for these schemes to be abolished. turning to the monetary analysis, we need to recognise that the latest monetary data refer to the end of august and thus do not yet embody the impact of the recent intensification of the financial market turmoil. further data on this impact will be carefully evaluated. as a general observation, previous episodes suggest that financial market tensions can have a relatively limited impact on monetary developments, but they have also been associated with large portfolio shifts and thus have exerted significant influence on monetary data. while the still strong underlying pace of monetary expansion points to upside risks to price stability over the medium term, data up to august show that the growth of broad money and credit aggregates moderated over the past few months, reflecting the monetary policy decisions taken since 2005 to address risks to price stability. as a more detailed examination shows, the flat yield curve and the structure of bank deposit rates have led to a number of substitution effects. first, there has been a substitution from longer - term maturity assets into instruments covered by m3, which offer similar remuneration but greater liquidity and less risk. as a consequence, the annual growth rate of m3 probably overstates the underlying pace of monetary expansion. second, there have been substitution effects within m3. in contrast to the dynamic developments in m3, annual m1 growth has fallen to very low levels. this reflects relatively attractive interest rates for time deposits, which have increased the opportunity cost of holding cash or overnight deposits. although, at the level of the euro area as a whole, the availability of bank credit has, as yet, not been significantly affected by the ongoing financial tensions, the gradual moderation of growth in loans continued in the august data, as previously anticipated, with corporate demand for credit slowing. at the same time, the growth of loans to households continues to follow the downward trend observed over the past few years, as a result of higher short - term interest rates and housing market weakness in several parts of the euro area. to sum up

christine lagarde : towards a green capital markets union for europe speech by ms christine lagarde, president of the european central bank, at the european commission ’ s high - level conference on the proposal for a corporate sustainability reporting directive, frankfurt am main, 6 may 2021. * * * i would like to thank commissioner mcguinness for inviting me to speak at this conference on the commission ’ s proposal for a corporate sustainability reporting directive. when technology and finance unite around a common purpose, the consequences for monetary unions can be far - reaching. let me borrow an example from us history. the economic and financial integration of the united states in the late 19th century owed a great deal to the new technology of railroads. with a fragmented local banking system, the huge amount of financing needed for this project could only be mobilised via capital markets, notably in the form of railroad bonds. this, in turn, laid the foundations for the development of the us - wide financial system. 1 the railroads ended up linking not only the far - flung corners of the union, but also its capital markets. if you allow me the analogy, i see some parallels between this period of us history and the eu ’ s transition today towards a sustainable economy, backed by the growth of sustainable finance. the shift to net zero emissions, together with an adequate digital backbone, will require major investments across europe in technology, infrastructure and networks. fragmentation between national financial markets might constrain our ability to finance future investments. but if green finance continues to emerge to fund this transition, the consequences for europe ’ s financial system could be sweeping. in fact, i believe that the green transition offers us a unique opportunity to build a truly european capital market that transcends national borders – or what i would call green capital markets union ( cmu ). and, like the railroads in the past, this could have ramifications for our monetary union that reverberate more widely. integrating green capital markets could play a part in addressing two of the wider challenges we face today. first, we face the challenge of making our monetary union more resilient to cyclical shocks. to achieve this, we must do better at reducing risks, and also at sharing risks across countries. and second, we need to transform our economies as structural changes speed up around us. we must redirect activity towards the green and digital sectors as quickly as possible, which will help raise europe ’ s growth potential. 2 addressing these challenges