smes and vses. bank credit is partially replacing market financing due to a more contained increase in its cost. as regards businesses, we should remain vigilant but not alarmist as we sometimes hear. admittedly, their cash position has deteriorated, falling from an initially high level, as confirmed by our last monthly survey – in industry more than in services - but we are not witnessing a major return of the " spectre of defaults ”. at the end of january, the number of defaults had risen to just under 43, 000 over the past 12 months. 1 this level is above the artificially low level recorded during the covid years with their exceptional support measures, but still well below the average of roughly 59, 000 recorded over the 2010 - 19 period. we should gradually move towards this figure, and we are monitoring the situation of smes and vses in some of the more fragile sectors very closely. at the same time, business start - ups remain at a record level, at over 400, 000 excluding microentrepreneurs. similarly, we do not have any general concerns about the reimbursement of sgls. since february 2022, we have received 671 requests, covering less than 0. 1 % of the total number of sgls. of the eur 143 billion that have helped close to 700, 000 businesses, eur 46 billion have already been repaid. and today, over 95 % of businesses are repaying their sgl correctly. the banque de france's credit mediation remains mobilised in each of your departements to address the most difficult cases, within the framework of the " local agreement " renewed for 2023. regarding households, growth in housing loans still amounted to + 5. 3 % in december ( and + 5. 1 % in january ) in the context of a gradual rise in the average rate, which then stood at 2. 05 %, 2 compared with 2. 9 % on average in the euro area and 3. 5 % in germany. in france, housing credit remains the cheapest, business failures | banque de france ( banque - france. fr ) excl. fees and insurance ; loans to individuals — december 2022, banque de france, 3 february 2023 page 4 sur 5 most abundant and safest in europe - with 97 % of outstanding loans at fixed rates. source : ecb of course, we have come out of the years of exceptionally easy

increased employment for the lowest parts of the income distribution and diminishing savings revenues at the highest end. on wealth, the jury is still out, as the middle class benefited from the rise in housing prices, but the better - off could have benefited still more on their financial assets. that said, fiscal policy is and should remain the best tool for fighting inequality as it can be more targeted than monetary policy. this is especially true in europe ; thanks to our social model. indeed, the debate about inequality and monetary policy seems to be somewhat less passionate on our side of the atlantic. however, to the extent that ecb programs currently support governments borrowing and fiscal policy, we can see this as an indirect channel to reduce inequalities. ii. c. financial stability financial stability is related to the inequality debate : the common link is the level of asset prices. the question of asset bubbles is not reserved for economists or financial markets. at the banque de france and the ecb we have been conducting extensive listening exercises and the issue has been frequently raised by the general public. moreover, to what extent financial stability concerns should figure in monetary policy decisions is a perennial debate. most central banks have a separation principle in which monetary policy and financial stability, to be dealt with by macroprudential policy, are kept entirely distinct. this clear division of responsibilities has worked well but i think recent developments have tipped the balance in favour of more integrated approach. first, we are no longer in a linear world. when r * is very low, there is a fundamental asymmetry created by the effective lower bound on interest rates. we have created substitute instruments to compensate for the impotence of conventional monetary policy at the effective lower bound but these instruments, although still effective, have some adverse side effects on excessive risk taking. second, the macroprudential instruments we actually have, while remaining the first and main line of defense, are insufficient to address the whole range of financial stability concerns. we should not be panglossian, in the phrase of charlie bean vii. consequently we must accept that financial stability concerns have to be a factor in the setting of other instruments, and in particular monetary policy. this is the more integrated approach that i want to plead for. this does not imply a systematic ( mechanical ) reaction to financial stability indicators, and it is very different from the leaning against the wind strategy. what i suggest is a slight evolution in our analysis – the data mix – and in our