at the same time, risks to domestic price and cost developments are contained. overall, we need to monitor closely the future evolution of all available price indicators. turning to the monetary analysis, the annual growth rate of m3 remained slightly negative, at – 0. 1 %, in march 2010. together with the continued negative annual growth in loans to the private sector – – 0. 2 % in march – the latest data further support the assessment that the underlying pace of monetary expansion is moderate and that the inflationary pressures over the medium term are contained. shorter - term developments in m3 and loans have also remained muted. the actual growth in m3 is seen as weaker than the underlying pace of monetary expansion, as the rather steep yield curve continues to foster the allocation of funds into longer - term deposits and securities outside m3. at the same time, the still narrow spreads between the interest rates paid on different m3 instruments imply low opportunity costs of allocating funds to overnight deposits rather than other m3 instruments. this is reflected in the continued marked difference between weak annual growth in m3 and strong annual growth in m1, which was 10. 9 % in march. however, with the current interest rate constellation already in place for some time, the latest data suggest that the large shifts in the allocations of funds are waning. the annual growth of bank loans to the private sector remained negative in march, but this conceals a further positive monthly flow. it also conceals ongoing opposite developments at the sectoral level, with positive, increasing annual growth in loans to households on the one side, and negative annual growth in loans to non - financial corporations on the other side. while the lagged response of loans to non - financial corporations to economic activity is a normal feature of the business cycle, the data over the past few months point to a possible discontinuation of the earlier downward trend in annual loan growth. the latest data also confirm that the reduction in the size of banks ’ overall balance sheets has not continued since the turn of the year. however, further adjustments cannot be ruled out and the challenge remains for banks to expand the availability of credit to the non - financial sector when demand picks up. to address this challenge, banks should turn to the market and use present funding conditions to strengthen further their capital bases. to sum up, the current key ecb interest rates remain appropriate. taking into account all new information since our meeting on 8 april 2010, we expect price developments to remain moderate over the policy - relevant horizon

improved training schemes and sufficient flexibility in labour contracts are required in order to avoid an increase in structural unemployment. at the same time, existing competitiveness problems, as well as domestic and external imbalances, need to be urgently addressed by the countries concerned. to that end, wage - bargaining institutions that allow wages to adjust appropriately to losses in competitiveness and the unemployment situation are indispensable. likewise, measures that increase price flexibility and non - price competitiveness are essential. finally, an appropriate restructuring of the banking sector should play an important role. sound balance sheets, effective risk management and transparent, robust business models are key to strengthening banks ’ resilience to shocks and to ensuring adequate access to finance, thereby laying the foundations for sustainable growth and financial stability. we are now at your disposal for questions.