##b interest rates, which has reduced the remuneration of short - term deposits and marketable instruments and fostered corresponding shifts in the allocation of funds not only within m3 but also to instruments outside m3. the outstanding amount of mfi loans to the private sector contracted further in march, reflecting mainly a negative flow of lending to non - financial corporations. the reduced amount of financing is again related mainly to loans with shorter maturities, while the net flow of loans with longer maturities remained positive. the decline in short - term lending is likely to reflect to a large extent lower demand in the wake of a sharp deterioration in economic activity and business prospects at the start of the year. interest rates on short - term and floating rate bank loans to households and non - financial corporations have declined significantly over recent months, indicating that the transmission of monetary policy impulses to the economy continues. overall, the latest money and credit data support the assessment that both banks and money - holding sectors are reducing their highly leveraged positions built up in past years. to sum up, the governing council ’ s decisions today take into account the expectation that price developments will continue to be dampened by the substantial past fall in commodity prices and the marked weakening of economic activity in the euro area and globally. the latest economic data and survey information suggest tentative signs of a stabilisation at very low levels, after a first quarter which was significantly weaker than expected. the world economy, including the euro area, is still undergoing a severe downturn, with the prospect of both external and domestic demand remaining very weak over 2009 before gradually recovering in the course of 2010. this assessment incorporates a number of adverse developments which are likely to materialise over the coming months, such as a further deterioration in labour markets. at the same time, available indicators of inflation expectations over the medium to longer term remain firmly anchored in line with the governing council ’ s aim of keeping inflation rates at levels below, but close to, 2 % over the medium term. a cross - check with the outcome of the monetary analysis confirms that inflationary pressure has been diminishing, as money and credit growth have further decelerated in recent months. against the background of these developments, after today ’ s decisions we expect price stability to be maintained over the medium term, thereby supporting the purchasing power of euro area households. all in all, since the intensification of the financial crisis in september 2008, the eurosystem has taken a series of measures that are unprecedented

willem f duisenberg : some remarks on the euro in a us context speech by dr willem f duisenberg, president of the european central bank, at a breakfast meeting of the council on foreign relations, new york, 19 april 2002. * * * introduction it is an honour for me that paul volcker has introduced my presentation this morning. under his chairmanship and that of alan greenspan, the federal reserve has made an invaluable contribution to the well - being of the american people, and to the world economy. paul volcker managed to stop the inflation spiral, which started in the early 1970s, and turned it into a sustained disinflation process. the low inflation record combined with high real growth in the 1990s here in the united states also owe a lot to the courageous and determined policy that paul volcker carried out in the 1980s, which gave clear priority to monetary stability. it is also an honour for me to address such a distinguished audience in the united states. in particular last year, the attention of the european central bank ( ecb ) and the national central banks of the european countries that have adopted the euro – jointly referred to as the eurosystem – was focused on communicating to the 300 million citizens of the euro area the ins and outs of the introduction of the euro, in particular the euro banknotes and coins. at the same time, the ecb realises that it is also important to address audiences outside the euro area and the european union. although we refer to the euro as'our currency ', the impact of the euro goes beyond the boundaries of the euro area. indeed, the euro may be referred to as one of the key currencies in the world, with the eurosystem being the central bank responsible for issuing it. in particular, people on this side of the atlantic may be interested to learn more about the euro. indeed, knowledge of what is happening in europe in this respect still seems to be rather limited. this is partly because, in the 1990s, us commentators were somewhat critical of european policy makers seeking to establish a monetary union. many of these commentators thought the europeans were'building castles in the air '. however, as 1 january 1999 approached, the date when the exchange rates of 11 european countries were irrevocably fixed and the euro was introduced, it became clear that, indeed, something special was happening in europe. in my speech today, i would like to elaborate on some key aspects of the