christine lagarde : 20th anniversary of the entry into circulation of euro banknotes and coins speech by ms christine lagarde, president of the european central bank, at the plenary session of the european parliament, strasbourg, 14 february 2022. * * * the introduction of euro banknotes and coins in 2002 was a milestone in european history, as it put a tangible sign of european integration in the pockets of over 300 million citizens in 12 countries. it was a historic event at a global level, as it represented – and still does – the world ’ s largest ever monetary changeover. since 2002, a further seven countries have adopted the euro, which has become an integral part of our european identity, uniting us across national borders, languages and cultures. sharing a currency is more than simply using the same means of payment ; it is being part of a common endeavour. this feeling of shared identity is well recognised by our fellow citizens. when asked what the european union means to them, the single currency was second on the list of things they thought of most1. the euro has simplified the lives of european citizens and produced tangible economic benefits that we sometimes take for granted. it has supported the free movement of people, goods and services and allowed european citizens to work, study and travel in 19 different member states without worrying about exchanging money. the euro has also made it easier for businesses to trade across borders. it has facilitated closer economic ties between countries and allowed small and medium - sized enterprises to participate in cross - border value chains more easily. from 1990 to 2002, trade between the soon - to - be 19 countries of the euro area increased by less than 5 %, whereas since the introduction of the single currency it has grown by almost 200 % 2. by deepening the integration among our economies, the euro has also strengthened europe ’ s role and autonomy. it has quickly become the second most important currency in the world and is increasingly being used in key markets for our future growth. indeed, in 2021 about half of total green bond issuance around the world was denominated in euros3. the european central bank is the custodian of the euro. it is our job to keep banknotes secure and safeguard the supply of euro cash to the economy4, as well as investigating innovative and complementary forms of payment. last year, we launched the digital euro project. 5 we will investigate how a digital euro could offer a convenient, cost - free means of payment, allowing people to pay

##ary risks and further policy rate cuts by the ecb have faded and focus is beginning to shift towards a normalisation of policy in the future. indeed, as the governing council has recalled recently, if the euro area economy recovers and inflation proceeds further on its path towards the ecb ’ s inflation aim in a sustained manner, a discussion on policy normalisation becomes warranted in the future. any such discussion should, of course, take place in a structured, orderly and appropriately prudent manner and the governing council is convinced of the need to continue an accommodative monetary policy stance without deviation from the announced measures under implementation to be expected. but we could examine the interaction of our different policy measures and their functioning in a new environment of balanced prospects as opposed to the environment of deflationary risks that prevailed when they were first introduced. as has been stated, our forward guidance needs to be aligned with an evolving assessment to underpin both the consistency and credibility of our communication. prospects for the banking system in this context, it is imperative that the banking sector is well - positioned to foster sustainable growth in the coming years as the exceptional levels of monetary policy support will be adjusted in line with the progress towards our policy objective. a well - functioning, profitable and resilient financial sector is vital for the long - term economic prospects of the euro area. allow me, then, to make three remarks on this topic. my first remark relates to bank profitability. as i have just discussed, the ecb ’ s unconventional monetary policy measures have been successful in fulfilling their intended purpose. but that is not to say that they did not have any side effects. they have drawn criticism for their 2 / 5 bis central bankers'speeches negative effects on financial sector profitability. i believe such criticism is somewhat unbalanced. in the absence of the recovery generated by these unconventional measures, unemployment would have been higher, credit growth lower and a greater proportion of loans would have been non - performing. all of these things would have weighed on banking sector profitability. moreover, while acknowledging that banks face a charge because of the negative rates policy, internal data show that this burden is alleviated by the benefits gained in wholesale funding markets. between january and march 2017, on average, two thirds of overnight unsecured funding was raised at an average rate of around – 46 basis points, essentially through counterparties having no access to the ecb facilities. similar developments were observed in the secured markets for