the private sector remains the main driver of monetary dynamics. on an annual basis, loans to the private sector as a whole have continued to increase at double - digit rates over recent months, with borrowing both by households and by nonfinancial corporations rising rapidly. ongoing strong lending to households continues to be explained, in particular, by borrowing for house purchases. the dynamic growth of money and credit, in an environment of already ample liquidity, points to increased upside risks to price stability at medium to longer horizons. monetary developments therefore require careful monitoring, particularly in the light of strong dynamics in housing markets. to sum up, annual inflation rates are expected to remain elevated, at above 2 % on average, in 2006 and 2007, with risks to this outlook on the upside. given strong monetary and credit growth in a context of ample liquidity, a cross - check of the outcome of the economic analysis with that of the monetary analysis confirms that upside risks to price stability prevail over the medium term. a further adjustment of interest rates was therefore warranted. by acting today in a timely fashion, the governing council is helping to anchor medium and long - term inflation expectations at levels consistent with price stability, thereby making an ongoing contribution to sustainable economic growth and job creation. looking ahead, given that our monetary policy continues to be accommodative, a progressive withdrawal of monetary accommodation will be warranted if our assumptions and baseline scenario are confirmed. the governing council will continue to monitor very closely all developments so as to ensure that risks to price stability do not materialise. concerning fiscal policies, given the outlook for economic growth, it is of crucial importance that euro area governments avoid pro - cyclical policies and step up the pace of fiscal consolidation. as budgetary targets for the current year are not particularly ambitious, a rigorous implementation of plans on the expenditure side is especially warranted, and any additional windfall revenues are best used for deficit reduction. beyond the implementation of such prudent policies in the remainder of this year, the medium - term focus of fiscal policies should be on correcting the underlying sources of imbalances in public finances. euro area governments, many of which are now finalising their budget plans for 2007, should take full advantage of the economic environment to bring forward the structural adjustment necessary for the durable correction of excessive deficits, so as to reach their mediumterm budgetary objectives at an early stage and thereby prepare public finances for the acute demographic challenges they must cope with.

point is to say that today ’ s discussion showed that central banks need to further their exploration of new technologies to prepare for the future of finance. this is the goal that banque de france has been pursuing since the launch of its first experiments on wholesale cbdc in 2020. we are now taking this endeavour a step further with a second round of experiments. let me stress that it is a collective work, whose conclusions will feed the eurosystem ’ s reflection on cbdc. • the entry into force of the european " pilot regime " next year offers an invaluable opportunity for private players but also for public players. in this sense, offering settlement solutions in central bank money - for the cash leg of transactions involving tokenised securities - could allow tokenised finance to benefit from the most secure and liquid asset. • thank you again for your participation. page 3 / 3