customer relationships can be observed. the driving forces identified in this speech may have put the industry under pressure but, more importantly, they have also created new opportunities. one is left with the undeniable impression that the regulation of banks has not prevented them from developing new activities and entering into new markets. in this respect, it may be noted that banking supervision and regulation are naturally frequently re - assessed in light of new developments. the recent suggestions for adaptations in the regulatory framework for banks by the basel committee on banking supervision mirror the genuine intention and proactive attitude of supervisors to ensure sound market conditions in the financial services industry, and to safeguard the stability of the global financial system. having said all this, i cannot but finish with an optimistic observation. the banking industry has shown ingenuity in coping with many challenges. this is mirrored in the diversification of its activities. by continuously aiming at a high level of ethics and professionalism within the dutch investment community, the netherlands society of investment professionals will certainly contribute to the health and integrity of the financial sector in general, and the banking industry in particular.

and 0. 7 % in 2009. owing mainly to base effects stemming from the past behaviour of energy prices, headline annual inflation rates are projected to decline further in the coming months, possibly temporarily reaching negative levels around mid - year. thereafter, annual inflation is expected to increase again, also owing to base effects stemming from past energy price developments. accordingly, it is likely that hicp inflation rates will fluctuate noticeably during 2009. such short - term volatility is, however, not relevant from a monetary policy perspective. for 2010, ecb staff project hicp inflation at between 0. 6 % and 1. 4 %. this range also represents a substantial downward revision compared with the december 2008 eurosystem staff macroeconomic projections, mainly reflecting the change in the economic growth outlook. available forecasts from international organisations have also been revised downwards and broadly confirm an outlook of moderate inflation rates in 2010. as in the case of growth, a considerable degree of uncertainty surrounds the inflation projections. risks to these projections are broadly balanced. they relate in particular to the risks to the outlook for economic activity as well as to risks to commodity prices. turning to the monetary analysis, the latest data and estimates provide further evidence of an ongoing deceleration in the underlying pace of monetary expansion in the euro area. this implies a further reduction in inflationary risks in the medium term. the further deceleration in underlying monetary dynamics has contrasted with the high month - to - month volatility of developments in m3 and its components which has been observed since the financial turmoil intensified in september 2008. this relates in particular to marketable instruments, but also to the significant substitution that is taking place between different categories of deposits included in m3. while annual m3 growth declined further, to 5. 9 %, in january 2009, the annual growth rate of the narrow aggregate m1, which includes the most liquid assets, rose to 5. 2 %. volatility also characterised the flow of mfi loans to the private sector around the turn of the year, with a monthly contraction in the outstanding amount in december followed by a significantly positive flow in january. however, discounting a possible turn - of - the - year effect and looking beyond these latest developments confirms the decline in the growth of bank credit to households and non - financial corporations observed in 2008. at the same time, it appears that the substantial past reduction in the key ecb interest rates is increasingly being passed through to bank lending rates, indicating that, despite the