bundesbank that have been advocated so frequently in the past few weeks are already in full swing ; the bundesbank is by no means behind the curve in this respect. throughout the world questions concerning financial system stability are becoming more important for central banks. a stable and efficient financial system is absolutely essential if the central banks are to fulfil their stability mandate. in the past few years the bundesbank has expanded its analytical and research capacity for identifying potential risks to financial stability and will extend this field further in future. we will include the results both of the analysis of current risks to the financial system and the research into the underlying relationships in the international debate on financial system stability and developments in the international financial architecture at the g - 10 meetings. 2. 2... in monetary policy the primary objective of a central bank is and will remain safeguarding monetary stability. since the start of monetary union just over five years ago the eurosystem has built up a good reputation and has gained the confidence of experts and the public alike. the euro is a stable and internationally respected currency. according to the provisional estimate by eurostat for the harmonised index of consumer prices, the price level in the euro area was 2. 0 % higher in april year on year compared with 1. 7 % in march. this is consistent with the ecb ’ s target of keeping price inflation to less than but close to 2 % in the medium term. to achieve its monetary policy targets the governing council of the ecb applies its proven monetary policy strategy, which was slightly revised last year. the overall evaluation of the risks to price stability consists of two pillars which ensure that the primary purpose of the monetary analysis is to countercheck that the short - term and medium - term assessments arising from the economic analysis will also be applicable in the long term. the economic analysis suggests that the gradual recovery which began in the euro area this spring will continue. while export demand continues to have an expansionary impact, domestic demand remains subdued, especially in the case of private consumption. the monetary analysis indicates that there is a persistently large liquidity overhang in the euro area. this is mainly the result of previous portfolio shifts. in view of the lack of consumer confidence, i do not see any danger of this excess liquidity leading in the near future to increased price pressure as a result of a sudden surge in demand. the very low level of key interest rates, the ample liquidity supply and the favourable financing conditions are

francois villeroy de galhau : challenges for france ’ s economy and financial sector in 2016 new year address by mr francois villeroy de galhau, governor of the bank of france, paris, 18 january 2016. * * * ladies and gentlemen, thank you for coming here today to this magnificently restored golden gallery. this is the first time that i am giving this address as governor of the banque de france, but it is an auspicious tradition that brings us together. i would like to start by extending my warmest wishes to you, your colleagues and your institutions. 2016 has already been marked by volatility : weak financial markets and commodity prices, from china and the middle east ; political uncertainty in europe, in southern europe, in eastern europe, north - western europe with the british referendum, and even in central europe with the refugee crisis. it is our duty to be vigilant, but we must also, on the one hand, distinguish real information from background noise and real challenges – and there are no shortages of them – from the sensational and sometimes excessive statements at this start of this year ; on the other hand, in the face of current volatility, we must stick to our mediumterm objectives. this evening i will not discuss the eurosystem ’ s monetary policy as we are in the “ silent period ” leading up to the governing council meeting this thursday. such longterm strategies also apply to the reforms in europe and in france. i would like to broaden my personal wishes to three collective wishes : for our country and its economy first ; for its smooth financing second ; and for financial stability and the soundness of your institutions lastly. 1 ) today a confirmed recovery is underway, with growth of over 1 % in france in 2015, and 1. 5 % in the euro area. in 2016, despite the uncertainties, all indicators point to higher growth. france must now transform this modest but real recovery into strong, lasting, job - creating growth. to do this, two conditions must be met in 2016 : public reforms must be pursued, and corporate investment must be stepped up. as regards the reforms, france is currently being penalised by excessive debt levels in its public sector ( differential of 25 % of gdp vis - a - vis germany, whereas both countries displayed the same level in 2010 ) and the deterioration in its trade balance and competitiveness. the fight for growth and against unemployment can only be won over time,