system and a better orientation of interest rates in the inter - bank market. financial markets were more relaxed with their risk premium gradually falling. interest rate in the primary market continued its dropping tendency since a year ago, as a reflection to the moderate demand of the fiscal sector for funding and the good liquidity situation of the banking system. moreover, the reduction of the key rate was followed, to a satisfactory degree, by [ falling ] interest rates in deposits and loans in leke, hence enabling a good introduction of monetary policy decisions into the economy. beyond a better transmission of monetary policy decisions on interest rates of financial markets during the second half, the bank of albania deems that their introduction into the real economy remains incomplete. referring to developments in lending to the economy during the second half, loans to the private sector, on average, increased with same pace as during the first half. annual lending growth in november amounted to 10. 1 % almost commensurate with the level at the end of the first half. slower increase of loans to the private sector gave a low contribution to money supply expansion in the economy, reconfirming controlled inflation pressures by the domestic economy. broad money bis central bankers ’ speeches m3 growth came close to its historic average during the fourth quarter of the year, marking 11. 9 % and mainly in time deposits in the banking system. although banks did not tighten their lending terms and conditions – on the contrary, during the second half of the year there were signs of easing – demand for bank lending by the private sector was low. this remains low due to the existence of negative output gap by businesses and the growing consumer tendency to save under a perceived added insecurity for the future and a more cautious behaviour towards actual consumption. reduction of risk premia in financial markets, maintaining positive economic growth, employment and salaries, as well as a clearer short - term perspective of the economy are expected to contribute to an increased demand for bank loans in the coming period. the banking system meets the prerequisites, in terms of liquidity, capitalisation and more favourable financing conditions to response to this demand. our outlook for the future supports keeping a positive progress of the economy for 2011. growing demand is expected to be subject to the comparatively better progress of the domestic demand during this year. private consumption and investments are expected to rise further, while, after the slowdown in 2010, the fiscal sector is expected to contribute positively to the economic growth. in spite of this, the

francois villeroy de galhau : with economic recovery underway in europe, what monetary policy? speech by mr francois villeroy de galhau, governor of the bank of france, at a lunch - debate at the centre des professions financieres, paris, 28 september 2017. * * * accompanying slides ladies and gentlemen1, it is a pleasure to be here with you for this lunch - debate of the centre des professions financieres. i would especially like to thank your chairman michel pebereau for his kind invitation. today, i am delighted to be able to speak to you on a highly topical subject : monetary policy in europe in the context of economic recovery. the prospect of a very gradual normalisation of our monetary policy gives rise to concerns and expectations. i will begin by focusing on what our accommodative monetary policy has already achieved today, before talking about prospects for the future. i. what is the situation today? economic recovery in the euro area is here [ slide ]. it is robust and broadly based across countries and sectors. our latest ecb forecasts2 confirm this : growth should stand at 2. 2 % in the euro area in 2017, i. e. a significant upward revision of 0. 3 point compared with june ’ s forecast of 1. 9 %. this means that for the second consecutive year, euro area growth will be comparable to that of the united states. and that, according to eurosystem calculations, the output gap will return to close to zero by the end of the year ( 0. 6 % ), even though france ’ s situation is less favourable due to its growth lag ( output gap of around 1. 4 % according to our calculations ). the non - standard monetary policy that we have been conducting since 2014 is contributing to this acceleration of growth in the euro area, by supporting domestic demand and by fostering very favourable financing conditions. in concrete terms, this acceleration results in more jobs – over 6 million jobs created in the euro area since the start of 2013 – and in a pick - up in investment. corporate investment in particular, decisive for supply capacities, is clearly recovering : up 4. 7 % in 2015, 6 % in 2016, and is expected to be up 4 % in 2017 and 2018 ). [ slide ] this improvement in investment is underpinned notably by ongoing growth in lending to the private sector, at 2. 5 % year - on - year in august 2017 for