regarded as characterising the new economy is typically seen as the result of an underlying economic process which may take some time to bear fruit and therefore may clearly precede the emergence of the symptoms of the new economy in macroeconomic data. increased investment in computers, software, peripheral equipment, network infrastructure and other information and communication technologies are generally regarded as the most salient driving force behind what has been perceived as a new pattern of growth. second, the new economy is seen as being closely associated with the processes of deregulation, particularly in labour markets and network industries such as telecommunications, and globalisation, particularly in financial markets. other accompanying conditions, such as increased competition and flexibility in domestic goods and factor markets, as well as a stable macroeconomic environment, are also indispensable components of the same picture, if not equally powerful determinants of the phenomenon. they allow the full potential of technological innovation to be exploited and ensure that a faster pace of economic expansion and employment can be achieved on a more sustained basis and without destabilising inflationary pressures. the ecb cannot, however, " create " a new economy through its monetary policy. the new economy depends mainly on technological progress and the liberalisation of markets. however, the ecb can provide a positive contribution to growth and employment prospects by safeguarding price stability. maintaining price stability is the ecb's primary objective. unfortunately, this is sometimes forgotten. in the long run, pursuing this objective will help the economy to enhance its growth potential. in this context, the governing council of the ecb, at its meeting last thursday, confirmed the " wait and see " position with regard to the monetary policy stance. in an environment of increased uncertainty about the global economy and its impact on the euro area, the governing council is carefully assessing whether and to what extent upward risks to price stability will continue to decline. as far as the first pillar of our monetary policy strategy is concerned, the decrease of money growth indicates that upward risks to price stability have receded. as for the second pillar, domestic upward price pressures may decrease as a result of somewhat lower than expected gdp growth in the euro area. however, due to the risk of secound - round effects from past oil price increases, wage developments will be monitored carefully, as these might result in upward price pressures. in the financial sphere, the advances in information and telecommunication technologies have started to have their effects. this was perhaps even more visible than in the non - financial

possibility of excessive risk taking in the banking sector should not be neglected. faced with eroding margins in " old businesses ", banks may develop their activities in heretofore unexplored fields, by geographical expansion or by product development. in such circumstances, some banks may misjudge the risks inherent in the new activities, as a result of a lack of information, knowledge or skill. in such a situation, the prudential supervision of banks can help by assessing whether the capital buffers of banks remain sufficient for the banking sector as a whole. in financial markets, the issues are broadly similar. it is widely recognised that financial markets have been significantly transformed by the emergence of on - line brokers and electronic trading systems over recent years. in general, these developments have the potential to improve the functioning of financial markets. for example, on - line brokers often provide clients with detailed information regarding market conditions and the execution of orders. greater transparency on the part of brokers reduces the information asymmetry between brokers and customers. as a result, customers may be able to obtain better execution prices, not least because they can more easily see the prices quoted by various brokers. although the electronification of financial markets can bring benefits to customers, some risks are also associated with it. the first type of risk is by nature operational. advances in information and telecommunications technologies have made it easier than ever before to set up exchanges for financial products, for example on the internet. in the early stages of their development, the new trading systems need to be thoroughly tested so as to ensure maximum security. in particular, it is important for them to be able to withstand turbulent market conditions, including periods of exceptionally high trading activity and market volatility. the second kind of risk arises from the possibility of a disorderly segmentation of financial markets. as new trading systems are developed, the possibility exists that trading activity becomes spread over a number of exchanges. competition between exchanges is generally beneficial. however, customers may, at least over a transitory period, be faced with some difficulties in accessing the new exchanges. until the changeover is complete, customers may thus be unable to always obtain the best execution prices. in order to deal with this problem, it is important that the new exchanges establish clear rules regarding participation and price quotation as soon as possible in the process of starting their operations. finally, i would like to say a few words about electronic money. e - money is still