##n again. monetary policy the governing council of the ecb has responded forcefully to the largest euro area inflation surge on record. we raised our key policy rates by a total of 450 basis points between july 2022 and september 2023. we had kept them at those restrictive levels until june this year, with the key interest rates – in particular the deposit facility rate, through which we steer the monetary policy stance – contributing substantially to the ongoing disinflation process. following the two 25 basis point cuts in june and september this year, we decided to lower the key ecb interest rates again at our 2 / 3 bis - central bankers'speeches october meeting, based on our updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission. we remain determined to ensure that inflation returns to our 2 % medium - term target in a timely manner. our future decisions will ensure that our policy rates will stay sufficiently restrictive for as long as necessary. as we have made clear in our communication, the governing council is not pre - committing to a particular rate path. we will continue to follow a data - dependent and meeting - by - meeting approach to determining the appropriate level and duration of restriction. 3 / 3 bis - central bankers'speeches

to be stable. recent indicators have shown possible signs of slower growth in the early part of 2014 : growth of industrial production slowed ; retail sales and passenger vehicle sales moderated ; and fixed asset investment growth was a little lower in january and february, though quite stable in year - ended terms. given that the growth target was more than met last year, and given that the chinese new year holiday period makes it more difficult to assess trends in the data, it may be a little too early to draw strong conclusions. spot prices for steel and iron ore have fallen lately though, on movements to date, seem within the range seen in recent years. in fact, people may be too inclined to fret over what are still relatively small movements in monthly pmis, and the like, in china. sometimes they fret even more than they do over small bumps in the us economic data. the greater concern is the risks involved with the build - up of credit in so - called “ shadow banking ” over the past five or so years. to a considerable extent this growth in financial activity surely reflects the natural tendency to avoid the effects of price and quantity constraints imposed on the core banking sector, in an environment of strong demand for credit. in certain respects, it arguably provides genuine services to the economy. the potential problems, on the other hand, are all too familiar and well understood, at least in a qualitative sense. they include excessive maturity mismatches, where long - term loans are funded essentially by short - term borrowings ; less - than - ideal transparency about asset quality ; distorted incentives for provincial government entities ; assumptions on the part of investors in wealth management products about major bank or government support – and so on. recent credit events in china have increased focus on the possibility of failure of entities with non - viable business models. there has been a widening of risk spreads for lower quality credits. to some extent this could be seen as a positive development, as a clear - eyed assessment and pricing of underlying economic risks is critical for sound longer - run development in china no less than in any other nation. but of course we cannot know how much further this re - assessment of risk may have to run, nor how disruptive it could turn out to be for the chinese financial system and the economy. it is clear that the chinese authorities are across the issue, and in all likelihood they have the ability and resources to manage the situation. some reforms have already been implemented, which will help to manage