2. 5 % for 2012, between 1. 1 % and 2. 1 % for 2013 and between 0. 6 % and 2. 2 % for 2014. compared with the september 2012 ecb staff macroeconomic projections, the projection range for 2013 has been revised downwards. in the governing council ’ s assessment, risks to the outlook for price developments are seen as broadly balanced, with downside risks stemming from weaker economic activity and upside risks relating to higher administered prices and indirect taxes, as well as higher oil prices. turning to the monetary analysis, the underlying pace of monetary expansion continues to be subdued, taking into account developments over several months. most recently, the annual growth rate of m3 increased to 3. 9 % in october, from 2. 6 % in september, while m1 growth accelerated to 6. 4 % from 5. 0 % over the same period. these developments are partly due to a specific transaction leading to an increase in overnight deposits belonging to the non - monetary financial sector. at the same time, deposits from households and non - financial corporations also rose in october. overall, more observations are needed to distinguish between shorter - term volatility and more lasting factors. unlike in the case of monetary developments, there has been little change in credit growth. the annual growth rate of loans to the private sector ( adjusted for loan sales and securitisation ) remained at – 0. 4 % in october, unchanged from september. but this development reflects further net redemptions in loans to non - financial corporations, which led to an annual rate of decline in these loans of – 1. 5 %, down from – 1. 2 % in september. the annual growth in mfi lending to households remained unchanged at 0. 8 % in october. to a large extent, subdued loan dynamics reflect the weak outlook for gdp, heightened risk aversion and the ongoing adjustment in the balance sheets of households and enterprises, all of which weigh on credit demand. furthermore, in a number of euro area countries, capital constraints, risk perception and the segmentation of financial markets restrict credit supply. in order to ensure an adequate transmission of monetary policy to the financing conditions in euro area countries, it is essential to continue strengthening the resilience of banks where needed. the soundness of banks ’ balance sheets will be a key factor in facilitating both an appropriate provision of credit to the economy and the normalisation of all funding channels. decisive steps for establishing an integrated financial framework will help to accomplish this objective

. a single supervisory mechanism ( ssm ) is one of the main building blocks. it is a crucial move towards re - integrating the banking system. to sum up, the economic analysis indicates that price developments should remain in line with price stability over the medium term. a cross - check with the signals from the monetary analysis confirms this picture. further economic policy measures and progress in the reform of european governance should help to support financial market sentiment and improve the outlook for economic growth. in this context, the governing council looks forward to the roadmap towards genuine bis central bankers ’ speeches economic and monetary union to be decided at the european council meeting on 13 – 14 december 2012. initiatives to accelerate structural reforms that help restore competitiveness are particularly important to revive the growth potential of euro area countries and to increase employment. more generally, all euro area countries must ensure that their product and labour markets possess the adjustment capacity required for their smooth and effective functioning within a monetary union. finally, continued fiscal consolidation is expected to restore sound fiscal positions, in line with the commitments under the stability and growth pact and the 2012 european semester recommendations. significant progress has already been made in reducing domestic and external imbalances and in improving competitiveness. continued policy actions on the european, structural and fiscal reform fronts should be mutually reinforcing and send a strong signal to markets. we are now at your disposal for questions. bis central bankers ’ speeches