2018 ), op. cit. [ 24 ] see gourinchas, p. - o. and rey, h. ( 2019 ), “ global real rates : a secular approach ”, bis working paper, no 793, bank for international settlements ; jorda, o. and taylor, a. m. ( 2019 ), “ riders on the storm ”, federal reserve bank of san francisco working paper, 2019 - 20 ; and kiley, m. t. ( 2019 ), op. cit. [ 25 ] for further discussion, as well as an explanation of the complementarities between these measures, see lane, p. r. ( 2019 ), “ reflections on monetary policy ”, keynote speech at bloomberg, 16 september, london ; coenen, g., montes - galdon, c. and smets, f. ( 2019 ), “ effects of state - dependent forward guidance, large - scale asset purchases and fiscal stimulus in a low - interest - rate environment ”, working paper series, ecb, forthcoming ; and hammermann, f., leonard, k., nardelli, s. and von landesberger, j. ( 2019 ), “ taking stock of the eurosystem ’ s asset purchase programme after the end of net asset purchases ”, economic bulletin, issue 2, ecb, pp. 29 - 46. [ 26 ] the importance of fiscal policy for the equilibrium real rate is discussed in summers, l. and l. rachel ( 2019 ), op. cit. [ 27 ] see esrb high - level task force on safe assets ( 2018 ), sovereign bond - backed securities : a feasibility study, vol. i and vol. ii, together with the underlying working papers. for an overview, see leandro, a. and zettelmeyer, j. ( 2019 ). “ the search for a euro area safe asset ”, working paper, no 18 - 3, peterson institute for international economics. european central bank directorate general communications sonnemannstrasse 20, 60314 frankfurt am main, germany tel. : + 49 69 1344 7455, e - mail : media @ ecb. europa. eu website : www. ecb. europa. eu reproduction is permitted provided that the source is acknowledged. media contacts copyright 2019, european central bank

area over the past few years has created upside risks to price stability. over recent quarters, these risks appear to have become manifest as inflation has trended upwards. not least in the face of the ongoing tensions in financial markets, the monetary analysis helps to support the necessary medium - term orientation of monetary policy by focusing attention on the upside risks to price stability prevailing at medium to longer horizons. while the growth of broad money and credit aggregates is now showing some signs of moderation, reflecting the policy measures taken since 2005 to address risks to price stability, the strong underlying pace of monetary expansion points to continued upside risks to price stability over the medium term. the currently flat yield curve has given rise to a substitution from longer maturity assets into monetary instruments, which offer similar remuneration but greater liquidity and less risk. this substitution has led the current headline rate of m3 growth to overstate the underlying pace of monetary expansion. at the same time, shifts out of overnight deposits drove the annual growth rate of m1 down further in july. these effects, as well as other temporary factors, must be taken into account when assessing monetary developments and their implications. a broad - based analysis of the data, taking the appropriate medium - term perspective and allowing for these considerations, confirms the underlying strength of money growth. in particular, the pace, maturity and sectoral composition of borrowing from banks suggest that, at the level of the euro area as a whole, the availability of bank credit has, as yet, not been significantly affected by the ongoing financial tensions. this notwithstanding, growth in loans now shows signs of moderation, as previously anticipated, with corporate demand for credit slowing. at the same time, the growth of loans to households continues to follow the downward trend observed over the past few years, as a result of higher short - term interest rates and housing market weakness in several parts of the euro area. to sum up, a cross - check of the outcome of the economic analysis with that of the monetary analysis clearly confirms the assessment of upside risks to price stability over the medium term. the information that has become available since the last meeting of the governing council has confirmed that annual inflation rates are likely to remain well above levels consistent with price stability for a protracted period of time. the growth of broad money and credit aggregates is now showing some signs of moderation, but the still strong underlying pace of monetary expansion points to continued risks to price stability over the medium term. the latest economic data also confirm the weakening