rates and the associated tightening of financial conditions are still being transmitted to broader credit conditions through the banking channel. bank funding costs, including deposits from households and nfcs, as well as wholesale funding costs and securities – other than shares – are increasing. it is true that the pass - through of rate hikes to the remuneration of households ’ sight deposit remains limited, but the transmission to the remuneration of term deposits and deposits redeemable at notice is much stronger, although incomplete. page 4 sur 14 as a result households have started shifting towards term deposits, and so further increasing the average cost of funding for banks. turning now to bank loans to households and firms, let me stress that this credit channel is of primary importance in the euro area - much more so than in the united states - as bank loans remain the dominant source of financing for firms, in particular for smaller firms. 1 overall, the growth rate of loans has slowed due to a combination of higher borrowing rates, lower demand, and - for firms tighter credit standards. ( 1 ) the cost of credit has risen significantly from exceptionally accommodative levels. households in the euro area willing to buy a house at the end of 2021 could borrow at 1. 3 % in average whereas they have to pay almost 3. 5 % in march 2023, although significantly less in france ( 2. 6 % ). lending rates for firms the average share of bonds in debt financing has increased over time but only makes up 30 % of debt financing for firms. see holm - hadulla, f., musso, a., nicoletti g. and tujula m. ( 2022 ) “ firm debt financing structures and the transmission of shocks in the euro area ”, economic bulletin, issue 4, ecb. page 5 sur 14 have been rising still faster, from 1. 3 % at end - 2021 to 4. 2 % today. compared to 2005 - 2007, the increase in policy rates is much faster today. page 6 sur 14 the plain lines correspond to the cycle started in 2022, whereas the dashed lines show the previous tightening cycle in 2005. the dfr is growing more rapidly than the mro did in 2005. but the pace of the pass - through is relatively similar today compared to the previous cycle. lending rates to nfcs ( in red ) are increasing today in line with policy rates, just as in 2005. they increased by almost 300 bp from january 2022 to march 202

national central banks, was generally seen as a positive signal in a market hitherto inhibited by fears that governments might decide upon new gold sales. this was evidence that gold remains an important element of global monetary reserves. 2. concerning gold selling and gold lending : the banque de france and the bundesbank have been a driving force behind the 1999 joint statement on gold, which is fully consistent with our traditional position. and i quote : – “ the undersigned institutions will not enter the market as sellers, with the exception of already decided sales. – the gold sales already decided will be achieved through a concerted programme of sales over the next 5 years. annual sales will not exceed approximately 400 tons and total sales over this period will not exceed 2, 000 tons. – the signatories of this agreement have agreed not to expand their gold lendings and the use of gold futures and options over the period. ” ( end quote. ) the so - called “ washington agreement ” has clarified the intentions of the eurosystem as well as of the sveriges riksbank, the swiss national bank and the bank of england with respect to their gold holdings. first, it has re - emphasised the role of gold in stating that ( i quote ) “ gold will remain an important element of global monetary reserves ”. second, it has provided the market with some reassuring guidance concerning the sensitive issue of central banks ’ gold sales and lending. far from destabilising the market, the washington agreement brought more transparency to the gold market, and helped foster sounder conditions in the price formation process by reducing uncertainty and overall volatility. it is true, however, that the initial market reaction to the joint statement was extreme. the immediate impact of the washington agreement was all the more dramatic as a number of market participants ( gold mines, hedge funds ) had accumulated big and, i would say in some cases, excessive, short positions. the fact that the short sellers had to rapidly square their positions induced a brief period of higher volatility, but also created the conditions for a more orderly market and thus, during the last months, gold prices have fluctuated in a relatively narrow range. on balance, i do think that the joint statement has had a stabilising effect on the gold market thanks to enhanced transparency and clarity concerning central banks ’ intentions. let me now turn to the second topic of my speech : the euro after 18 months. ii. the euro after 18