may weigh on the corporate sector more heavily. however, historical patterns in the data may be poor predictors of potential future losses. how can and should monetary policy take financial stability into account? generally, monetary policy “ gets in all of the cracks ” of the economy, as jeremy stein argued. 5 however, it is a blunt tool that cannot target specific vulnerabilities. importantly, the european central bank ( ecb ) has the clear primary objective of maintaining price stability, and it thus needs to avoid conflicts of interest with other policy objectives. this does not mean, of course, that it should ignore financial stability issues. in last year ’ s strategy review, the ecb governing council thus added two important elements to its strategy to account for the implications of house price booms. first, financial stability aspects, including those related to real estate, are now regularly part of monetary policy discussions. this allows the interdependence of price and financial stability to be taken into account, where appropriate. second, the price index used to measure inflation will include the cost of owneroccupied housing. thus, house prices will directly enter monetary policy considerations. over longer horizons, including the costs of owner - occupied housing may not change inflation measures substantially. however, in periods of dynamic real estate price developments, the effect will be more significant. 6 clearly, macroprudential policy is the first line of defence against risks to financial stability. in the case of housing markets, borrower - based measures enhance the resilience of households and the “ quality ” of new lending. additionally, capital - based measures can strengthen the resilience of banks. with these buffers, banks are then better equipped to absorb losses – that strengthens their ability to lend even in the event of adverse shocks. thus, sufficient capital is a safeguard for the proper functioning of the financial system, including in stress episodes and during periods of structural change. in january 2022, german supervisors announced a package of macroprudential measures to address increasing vulnerabilities in the german financial system. 7 the countercyclical capital buffer was set at 0. 75 %, and the sectoral systemic risk buffer ( on exposures secured by residential real estate ) at 2 % of risk - weighted assets. both measures will bolster banks ’ resilience to adverse developments. as a complementary measure, the federal financial supervisory authority ( bafin ) called on lenders to closely monitor and address risks regarding new

of the 12 countries of the euro area for the euro has been a massive operation requiring enormous organisational, logistical, technical and economic efforts. its success has far exceeded our own expectations. in almost all its aspects, the euro cash changeover has progressed well and rapidly, without any major hitches. this was a crucial factor for acceptance of the new currency by the european public. the completion of the changeover has been a challenge of unprecedented dimensions that involved the banking sector, security carriers, retailers and the cash - operated machine industry. in order to guarantee a gradual and smooth supply of euro to the economy, euro banknotes and coins started to be distributed to the banking and retail sectors as from 1 september last year. 6. 4 billion banknotes worth some eur 133 billion, and more than 37. 5 billion coins with a total value of around eur 12. 4 billion, had already been frontloaded to the banking sector by the end of 2001. the adaptation of more than 200, 000 automated teller machines ( atms ), which supplied around 70 % of the new banknotes utilised for transactions within less than one week, was another key factor in the euro cash changeover. from the outset, european citizens showed a great deal of enthusiasm and have been very fast in adopting their new money. two weeks after the introduction of the euro banknotes and coins, the value of euro banknotes in circulation was higher than that of national banknotes, and the vast majority of cash transactions in the euro area were being conducted in euro. in the last few months, the eurosystem, i. e. the ecb and the national central banks ( ncbs ) of the 12 eu member states participating in the euro area, and a number of other parties, such as retailers, educational institutions, the tourism industry and the media, were heavily involved in the information campaign which acquainted the general public with the new money. the euro banknotes are endowed with distinctive characteristics and state - of - the - art security features which not only enable the public and professional cash handlers to recognise and check them quickly, but also make them some of the world's safest. the transition to the new banknotes and coins was facilitated by the fact that the financial markets were already fully accustomed to the euro. the introduction of the single currency three years ago was another exceptional success that opened the way to fundamental changes in the conditions in which governments, financial institutions and the private sector operate in financial markets