facilitating their lives. having been instrumental in laying the foundations for the euro, the maastricht treaty will remain vital and indispensable for the successful functioning of emu. the medium - term macroeconomic policy framework laid down in the maastricht treaty has contributed to a stable macroeconomic environment, and will continue to do so. in addition, the treaty provides for a clear allocation of responsibilities between eu institutions and member states, as well as clear mandates for all involved. the maintenance of price stability – the ecb's primary objective –, the independence of the eurosystem and the provisions safeguarding fiscal discipline, in particular as enshrined in the stability and growth pact, are among the hallmarks of this framework. furthermore, the path towards participation in the euro area mapped out in the maastricht treaty, focusing on sustainable economic convergence as a prerequisite for adoption of the euro, will also serve to guide prospective member states. the name maastricht will therefore always be connected with the euro and will forever have a prominent place in the history of europe. let me now turn to our regular examination of recent monetary, financial and economic developments. the governing council concluded today that there was no reason to change its previous assessment. accordingly, the key ecb interest rates were kept unchanged at a level which remains appropriate for the maintenance of price stability over the medium term. starting with the analysis under the first pillar of our monetary policy strategy, the three - month average of the annual growth rates of m3 rose to 7. 8 % in the period from october to december 2001, from 7. 4 % in the period from september to november. the governing council considers that monetary developments thus far do not indicate risks to price stability. the build - up in liquidity reflected in these data occurred in an economic and financial environment characterised by exceptionally high uncertainty worldwide and should therefore be only temporary. this assessment of low inflationary risks is also supported by the declining trend in the growth rate of loans to the private sector. however, a continuation of strong m3 growth could call for a reassessment of monetary developments, especially if there is further evidence of a recovery in the euro area economy. regarding the second pillar, while actual euro area production growth in the fourth quarter of last year and in the early part of this year is still expected to be subdued, new data confirm our expectation of a gradual improvement in economic activity in the course of the year. uncertainty as

had fallen by 9 pp since peaking in 2013, to 4. 8 % in 2020 q1, though this was still higher than in 2007. further, in that same period, the weight of forborne exposures relative to assets had fallen by 9 pp. also, the weight of lending to construction and real estate development, which came to account for 27 % of total lending to the non - financial private sector, stood pre - pandemic at around 10 %. finally, mortgage lending standards have been much stricter and, in the case of loans to firms, these have been tied far more to firms ’ efficiency. the level of solvency had increased, in terms of cet1 capital, from €158 billion in december 2007 to €214 billion in december 2019, up by slightly over 35 %. this rise in capital entailed from the 2008 peak to march 2020, the number of employees fell by 48 % and branches by 35 %. a notable increase in loss - absorption capacity. indeed, almost half of all capital took the form of buffers above the minimum regulatory level, which can be released should it prove necessary. 2 in comparative terms, the cet 1 ratio of the main spanish deposit institutions stood below the european average, while their leverage ratio is slightly above. this is because spanish banks ’ asset risk weightings are higher, basically as a result of a more intensive use of the standardised approach to risk management. the drive spread to the entire non - financial private sector in spain, the deleveraging of which from 2010 to 2019 ( almost 30 pp of gdp for the household debt ratio and 45 pp of gdp for firms ’ debt level ) has contributed to it being better positioned to tackle the strong shock to activity imposed by the pandemic. one way of illustrating this resilience are the stress tests we supervisors regularly conduct. this is the case of the flesb ( forward looking exercise on spanish banks ), conducted annually by the banco de espana. its latest aggregate results were published in our autumn financial stability report. in the harshest scenario considered in this exercise ( which includes the cumulative fall of 5. 7 % in spain ’ s gdp from 2020 to 2022 ), the decline in the cet1 ratio totalled 3. 9 pp for significant institutions with an international presence, 4. 6 pp for other significant institutions and 1. 3 pp for institutions under the direct supervision of the banco de espana. although this impact is significant and