mr. duisenberg reports on the latest meeting of the ecb governing council introductory statement by the president of the european central bank, mr w f duisenberg, at the press conference in frankfurt 4 / 2 / 99. ladies and gentlemen, the vice - president and i are here today to report on the outcome of today ’ s meeting of the governing council of the european central bank. let me start with the governing council ’ s discussion on recent economic developments and the decisions that the governing council has taken today in the field of monetary policy. at today ’ s meeting the governing council reviewed the latest monetary, financial and economic developments. after a careful examination of recent trends, in the context of its monetary policy strategy, it confirmed its earlier assessment that the outlook for price stability remains favourable. therefore, it decided that for the main refinancing operations to be settled on 10 and 17 february 1999 the same conditions will apply as for the first such operations settled earlier this year, i. e. they will be fixed rate tenders conducted at an interest rate of 3. 0 %. in addition, the interest rate on the marginal lending facility continues to be 4. 5 % and the interest rate on the deposit facility remains 2. 0 %. let me report in more detail on the governing council ’ s deliberations and thereby provide the explanations for the decisions which were taken today. on 1 february 1999 we released the latest data on monetary developments in the euro area. these data confirmed the continuation of a favourable outlook for price stability in the euro area. the latest three - month moving average of annual m3 growth rates ( covering the period from october to december 1998 ) was 4. 7 %. this result was unchanged from the average over the period from september to november 1998 and remained very close to the reference value for broad money growth of 4½ % set by the governing council. developments in the narrow aggregate m1 have been more buoyant recently. similarly, the growth of credit to the private sector continued to be high in december 1998. these developments seem to reflect, in particular, the current low levels of interest rates in the euro area. although they are not considered by the governing council to imply inflationary risks at this juncture, in particular the developments in credit growth will need to be carefully monitored in the coming months. with regard to the broadly based outlook for price developments and risks to price stability in the euro area, financial market indicators suggest that market participants continue to expect low inflation

arrived, we need to be especially cautious about a premature scaling back of these crisis measures. that could inflict more severe damage to the economy and pose larger risks to the financial sector. the cost of winding measures down too early as yet outweigh the potential cost of leaving them in place for too long. it is important that the support measures are in due course rolled back in a gradual and predictable way to prevent cliff - edge effects. in a severe shock such as this, which originated entirely outside the sector, it is only logical for the government to absorb a large part of the shock. the netherlands can also afford a temporarily higher public debt. the fact that the government has now laid down its support measures for a longer period of time will help reduce uncertainty for firms and households. the netherlands of course also depends on what happens in other countries. our economy and financial sector are closely interconnected with those of other european countries. the creation of a european recovery fund during the summer was therefore a positive move. we must prevent this crisis from leading to even greater economic growth imbalances in europe. as for dnb, we have given banks additional leeway to continue lending and absorb any losses by adjusting the buffer requirements for the major banks. in view of the current uncertainty we will be continuing these crisis measures. at any rate, the floor for the risk weighting of mortgage loans and the countercyclical capital buffer will not come into force before the end of 2021. in summary, we are still in a historically deep economic crisis. fortunately, this has not so far sparked a financial crisis. but with the pandemic flaring up, economic uncertainty is yet again increasing. the main challenge in this next phase is therefore to limit the damage to the economy and prevent the crisis from spreading to the financial sector. this concludes my introductory statement. i would be happy to answer any questions you may have.