percent in march 2024. while this decline was due mainly to lower energy prices, monetary tightening is also bearing fruit. according to the latest ecb staff projections, we expect the inflation rate to return to 2 percent on average in 2025. we are on a good path, but risks remain. at present, i am not fully convinced yet that inflation will actually return to target in a timely and sustained manner. core inflation remains high, especially inflation in the services sector. driven by continued strong wage growth, it is more persistent than goods inflation. by june, we will know a lot more, for example about wage growth in the first quarter. and this data will feed into new projections. if they help to increase our confidence in a timely and sustained return to 2 percent, i would be in favour of a rate cut in june. however, such a step would not necessarily be followed by a series of rate cuts. given the current uncertainty, we cannot pre - commit to a particular rate path. the governing council will continue to decide – meeting by meeting and based on incoming data – how we proceed. people trust us to soon restore price stability. we have to live up to this trust. 3 the digital euro – a matter of trust trust is also an important keyword when it comes to payments. trust is the soul of money. 1 and in times of change, as we are currently experiencing, trust is particularly important. digital transformation has radically changed the payment landscape. we have seen many new players, including fintech start - ups and bigtechs, who have successfully entered and established a prominent position in the payments market. by offering innovative and convenient means of payment, they have challenged incumbent payment solution providers, even though they lack the same level of trust. at the same time, cash is being used less and less. it cannot be used in digital payments, and it is also being used less at stores. in such an environment, the question arises as to the central bank's future role. cash is currently the only form of central bank money available to non - banks, including the general public. it is public money. all other means of payment for euro area citizens are provided by commercial issuers. 2 / 6 bis - central bankers'speeches public money is a cornerstone of our financial system. it does not only define the unit of account. in combination with regulation, it also ensures that a euro is ( literally ) equivalent to a euro, no matter who issued the

hans reckers : interaction of market and credit risk welcome address by dr hans reckers, member of the executive board of the deutsche bundesbank, at the conference on the interaction of market and credit risk, berlin, 6 december 2007. * * * ladies and gentlemen i would like to warmly welcome you to our conference on the interaction of market and credit risk, which is being held jointly by the research task force of the basel committee on banking supervision, the deutsche bundesbank and the journal of banking and finance. as a board member of the deutsche bundesbank, i am proud that our institution is hosting this conference of distinguished researchers, bank practitioners, regulators, and central bankers. i am especially proud that the deutsche bundesbank offered to host this conference more than one year ago when it was not at all clear that the interaction of market and credit risk would be receiving as much attention as it is today. given recent events in the financial markets, the interaction of different risk types has become quite topical. the conference topic was not chosen as a result of outstanding forecasting power. rather, the main motivation of the research task force to form a working group on the interaction of market and credit risk was the diversification benefits between market and credit risk – which have not really made it into the headlines. instead, another aspect of the interaction of market and credit risk has become newsworthy. it is the question of how an economy is affected if credit risk starts to be traded or, in other words, if credit risk transforms into market risk. the uncertainty of who finally bears the risk can have more severe effects than market participants would have expected, say, one year ago. i will not talk too much about the ongoing turbulence in detail because i am sure that the reasons behind it deserve a rigorous analysis. instead, let me give you some information on how this conference came into being. at the risk of boring the members of the working group on the interaction of market and credit risk, i think it may help participants from academia, the industry and regulatory authorities to relate the topic of the conference to the interests of these three groups. traders in the front office have considered market and credit risk jointly for a long time, not only regarding counterparty risk but also for the purpose of capital arbitrage, for instance. by contrast, ten years ago this was hardly the case for the banking book, for which credit risk was mostly the only risk type considered. about a decade ago, the trading of