interest rates from these operations are to be seen as indicators of market conditions. iii. regular assessment of monetary, financial and economic conditions finally, i should like to report on the governing council ’ s regular assessment of monetary, financial and economic conditions. we consider the current monetary trend for the euro area to be compatible with continued price stability in the euro area. the 12 - month growth rate of the broad monetary aggregate m3 decreased from 5. 0 % in october 1998 to 4. 5 % in november 1998. the three - month moving average of m3 ( covering the months september to november 1998 ) stood at 4. 7 %, i. e. very close to the reference value of 4½ % per annum. with respect to the broadly based outlook for price developments and risks to price stability, financial market developments may be seen as indicating a favourable assessment of the recent monetary policy decisions of the eurosystem, signalling that financial market participants expect the environment of price stability to continue. in this connection, i could mention the fall in longterm interest rates at the start of 1999 to new historical lows and the fact that the yield curve has shifted downwards. indeed, conditions for investment at the start of monetary union are favourable. this relates, in particular, to the currently prevailing low interest rate level, which significantly reduces the costs of financing for investors. economic growth in the euro area has become more broadly based, as is reflected in private consumption and investment. at the present juncture, the outlook for the euro area economy is still very much influenced by the uncertainties surrounding the evolution of the world economy in 1999. these uncertainties have adversely affected indicators of industrial confidence in the euro area and have fuelled expectations of a slowdown in economic activity in the short term. in part, the deteriorating external environment, which has its origins in the asian and russian financial crises, places a – 7 – high burden on overall growth prospects. the picture, however, is mixed. order books and capacity utilisation point to a less optimistic outlook, while retail sales and the recent pattern in employment and unemployment suggest more favourable trends. consumer confidence also remained high until late 1998. in general, this pattern of mixed evidence appears to characterise the economic situation in the euro area around the turn of the year, and we shall continue to monitor developments carefully. i should also like to emphasise that the governing council carries out a forward - looking assessment of inflationary pressures and carefully assesses risks to price stability,

so - called code of good conduct, which would set out best practices and guidelines for borrowers, lenders and the international community. the group of twenty consists of the g7 major industrialised countries, the largest emerging market economics and also the eu presidency, ecb, imf and the world bank, as well as the chairpersons of the international monetary and financial committee and the development committee. although these best practices would be non - binding, they could improve the process of crisis resolution. in particular, the code would spell out general principles for all parties involved and would also offer a “ toolbox ” of agreed instruments and best practices to be used by interested parties depending on the circumstances. the code would also include cacs in the set of instruments to be recommended. in the october meeting, the group of twenty decided to encourage a group of issuers and market participants to engage in further discussion. d. concluding remarks in conclusion, the issues generated by the fast evolution of the financial system i have been speaking about today are very complex and demanding for public authorities. i hope that i have been able to demonstrate that some elements of the necessary public response are very encouraging, while others will require renewed efforts. my objective has also been to focus on european issues and to highlight the special conditions of the euro area and the role of the ecb and the eurosystem in fostering financial stability. thank you very much, ladies and gentlemen, for your attention.