##ally recognised that the move to a single currency and ongoing financial innovations may generate fluctuations in the selected monetary aggregate which are not necessarily associated with inflationary or deflationary pressures. for this reason, it is important to continuously monitor the relevance of temporary factors or even structural changes in order to avoid a mechanistic policy reaction to deviations of the chosen monetary aggregate from the reference value. the results of this analysis and its impact on the escb ’ s monetary policy decisions will be explained to the public. let me turn now to the second key element of the monetary policy strategy, the broad - based assessment of the risks to price stability. the information contained in monetary aggregates, – 4 – while of the utmost importance, will by no means constitute the whole of the “ information set ” in the hands of the escb. in parallel with the analysis of money growth, a wide range of economic and financial variables will be used to formulate an assessment of the outlook for price developments. the envisaged strategy will enable the escb to perform a crosscheck between the information coming from the evolution of monetary aggregates and those from other economic and financial indicators. recent economic developments and prospects let me turn to the current economic situation. the euro area experienced a strengthening of economic growth in 1997, to 2. 5 %, and a further acceleration has been anticipated for this year. the global environment has, of course, deteriorated in the meantime, but this has not so far had an observable impact on growth, which has, in any event, been increasingly led by domestic demand. inflation has remained subdued and even fallen somewhat over the past year, partly as a result of the impact of weaker global demand on oil and commodity prices. however, the favourable pattern of inflation has also been supported by domestic factors, such as a very moderate development in unit labour costs and industrial producer prices. concerning recent price developments, hicp inflation for the euro area fell to 1. 0 % in september, due to a strong impact from food prices, but i would not want to read too much into this latest decline as some price components can be relatively volatile over short periods. more significantly, preliminary data suggest that various broad monetary aggregates for the euro area are increasing at between 3 and 5 %, and thus do not appear to signal any strong incipient inflationary or deflationary pressures. we are in line with the consensus view that inflation in the euro area will rise moderately in 1999, but

vitor constancio : opening remarks at the second conference of the escb macroprudential research ( mars ) network speech by mr vitor constancio, vice - president of the european central bank, at the second conference of the escb macroprudential research ( mars ) network, frankfurt am main, 30 october 2012. * * * ladies and gentlemen, it is a pleasure to be here today and open the second conference of the macroprudential research network ( mars ). i am particularly happy to see that our conference has attracted such a large and diverse group of speakers and participants, combining intellectual brilliance with practical experience. all the relevant institutions and sectors having an interest in, and a contribution to make to, the macro - prudential field are represented in this room. “ setting the scene ” today, let me start my remarks by recalling what mars is about and illustrating a few key directions in the endeavour. 1. the origin and purpose of the escb macroprudential research network ( mars ) as you know, mars is a research initiative involving central banks from the whole european union, i. e. from the european system of central banks. it was established by the escb in the spring of 2010, upon the proposal of our heads of research. 1 against the background of the crisis, which started in the summer of 2007 and reached systemic dimensions in september 2008, a stimulus was required to push forward our research on systemic risk and on analytical tools supporting macro - prudential oversight. so, we set up mars with the objective of “ developing core conceptual frameworks, models and / or tools that would provide research support in order to improve macro - prudential supervision in the eu ”. this is not to say that central banks did not have any systemic risk and macro - prudential research before the crisis. quite the contrary is true : it is the very tradition of central banks to take a systemic perspective, in particular in financial stability matters. most central banks already had their own financial stability reviews for which many analytical tools were developed. mars, however, puts our systemic risk work on a much broader basis than was previously the case. as you know, central banks treasure the strong scientific foundations of their policies very much. in my view, our interaction with the academic community, based not only on substantial state - of - the - art in - house research, but also on continuous “ peer review ” of central bank policies through external research is