free rate in the euro area appropriately, see european central bank ( 2014 ), “ euro area risk - free interest rates : measurement issues, recent developments and relevance to monetary policy ”, monthly bulletin july. [ 3 ] some of the long time series shown in chart 1 are from jorda, o., knoll, k., kuvshinov, d., schularick, m. and taylor, a. m. ( 2019 ), “ the rate of return on everything, 1870 – 2015 ”, the quarterly journal of economics, 134 ( 3 ), pp. 1225 - 1298. [ 4 ] today, i will not discuss the potential non - policy drivers of the secular downward trend in rates that i mentioned earlier. this is an important discussion, in which the decline of the natural real rate of interest plays a central role. its measurement, an understanding of its drivers and its relevance to monetary policy are crucial issues that are in the spotlight of academic research and central bank discussions. see, amongst others, brand, c., bielecki, m. and penalver, a. ( 2018 ), “ the natural rate of interest : estimates, drivers, and challenges to monetary policy ”, occasional paper series, no 217, ecb ; bauer, m. d. and rudebusch, g. d. ( 2019 ), “ interest rates under falling stars ”, federal reserve bank of san francisco working paper 2017 - 16 ; kiley, m. t. ( 2019 ), " the global equilibrium real interest rate : concepts, estimates, and challenges ", finance and economics discussion series 2019 - 076, board of governors of the federal reserve system ; and clarida, r. h. ( 2019 ), “ monetary policy, price stability, and equilibrium bond yields : success and consequences ”, speech at the high - level conference on global risk, uncertainty, and volatility, zurich, 12 november. i will discuss the drivers of the low level of rates in another speech later this week. [ 5 ] modelling and interpreting the level and the shape of the yield curve is an active field of research. since irving fisher ’ s “ appreciation and interest ” and john hicks ’ s “ value and capital ”, which are sometimes referenced as the earliest formalisations of the expectations hypothesis of the term structure, hundreds of research papers on the joint dynamics of bond yields of different maturities have been produced. this work spans (

stable, with most standing around 2 per cent. risk assessment the risks to economic growth remain tilted to the downside. growth could be lower if the effects of monetary policy turn out stronger than expected. a weaker world economy or a further slowdown in global trade would also weigh on euro area growth. russia's unjustified war against ukraine and the tragic conflict in the middle east are major sources of geopolitical risk. this may result in firms and households becoming less confident about the future and global trade being disrupted. growth could be higher if inflation comes down more quickly than expected and rising real incomes mean that spending increases by more than anticipated, or if the world economy grows more strongly than expected. 2 / 3 bis - central bankers'speeches upside risks to inflation include the heightened geopolitical tensions, especially in the middle east, which could push energy prices and freight costs higher in the near term and disrupt global trade. inflation could also turn out higher than anticipated if wages increase by more than expected or profit margins prove more resilient. by contrast, inflation may surprise on the downside if monetary policy dampens demand more than expected, or if the economic environment in the rest of the world worsens unexpectedly. financial and monetary conditions market interest rates have been broadly stable since our march meeting and wider financing conditions remain restrictive. the average interest rate on business loans edged down to 5. 1 per cent in february, from 5. 2 per cent in january. mortgage rates were 3. 8 per cent in february, down from 3. 9 per cent in january. still elevated borrowing rates and associated cutbacks in investment plans led firms to further reduce their demand for loans in the first quarter of 2024, as reported in our latest bank lending survey. credit standards for loans remained tight, with a further slight tightening for lending to firms and a moderate easing for mortgages. against this background, credit dynamics remain weak. bank lending to firms grew marginally faster in february, at an annual rate of 0. 4 per cent, up from 0. 2 per cent in january. growth in loans to households remained unchanged in february, at 0. 3 per cent on an annual basis. broad money – as measured by m3 – grew at a subdued rate of 0. 4 per cent in february. conclusion the governing council today decided to keep the three key ecb interest rates unchanged. we are determined to ensure that inflation returns to our two per cent medium - term target in a timely manner. we