unchanged course of our monetary policy at our march meeting. all european banks are subject to stringent basel 3 requirements and the overwhelming majority of them are also subject to single supervision within the banking union – which is a big difference vis - a - vis the us banking sector. french and european banks benefit from a well - diversified and profitable business base, be it on the deposits or on the credit side, unlike svb. the increase in interest rates has even started to boost their net interest income, which grew by 12. 7 % in 2022 at the twenty main euro area banks – this should page 5 sur 7 also raise questions over the alleged trade off between price stability and financial stability. this trade off is a fashionable idea at the moment, but i find it overdone. the goals are not necessarily incompatible, and we have separate instruments to achieve them. for the great majority of european banks, higher interest rates are beneficial. if however action were needed on financial stability, this would be effected chiefly through temporary liquidity instruments, which would not conflict with the increase in interest rates needed to ensure price stability. ii. a plea for more focused multilateral cooperation be they energy price pressures or financial spill - overs, the challenges currently faced by central banks require more than individual actions – they call for strong and effective multilateral impetus. i say it here in washington, during the imf spring meetings. however, the tide has been turning the other way since the russian invasion of ukraine. as geopolitical rifts deepen and trust fades, it is becoming more and more difficult for the g20 to deliver on its mandate, despite remarkable efforts from the indonesian and now the indian presidency. we need to find pragmatic ways forward to overcome deadlocks in global action and adapt to the new realities. alternatives to multilateral cooperation, such as regionalism, “ minilateralism ”, ii or “ polylateralism ” iii can usefully supplement it. working on smaller scales, or relying on non - state actors could help achieve breakthroughs. yet they cannot replace it. they lack the global reach of international state cooperation. iv hence my call for a focused or pragmatic multilateralism. v the principle is simple : rather than pursuing an exaggerated ambition, focus at present multilateral efforts on a few selected global issues, where there are clear common interests. in my view, without pretending to be exhaustive, these global issues on which page 6 sur 7 interests and deliver

optimal mix of non - conventional instruments. central banks in general, and the ecb in particular, have been quite innovative. new methods of forward guidance have been developed that have proved very efficient in the euro area in bringing down the short end of the yield curve. the main question, in my mind, concerns the best combination of the other bis central bankers ’ speeches instruments : negative deposit rates and asset purchases. there is no certainty that they can be implemented together in a consistent way. asset purchases are expected to act both through changes in asset prices and a flattening of the yield curve. they inject central bank liquidity that forces banks to hold excess reserves in significant amounts. however, the negative rates create a sort of tax on those reserves. the apparent rationale is that negative rates would push banks to grant new loans or buy assets, therefore reinforcing the impact of asset purchases. but since loans create deposits, and the sellers of assets receive liquidity that they need to deposit on bank accounts too, there is simply no way this liquidity can disappear until the central bank decides to withdraw it. even if residents choose to move into foreign assets, the liquidity in the domestic currency will not disappear and will ultimately be deposited with the domestic banking system. in the end, and as a whole, the banking system is trapped. the question then is how banks will react and with what consequences for the economy. they could impose negative rates on depositors, but that is not always easy, and in the case of households, it could have a negative impact on the wealth sentiment. they could increase their credit margins, with the effect of tightening credit conditions, although that may also be difficult if the demand for credit is weak. or the banking system could simply become weaker, with the paradox that the more a bank is conservative and well - managed, extending high - quality loans and covering them by deposits with no short - term market funding, the more it will be penalized! a second, different challenge, relates to the rigidities in the economy. price rigidity is higher in europe than in the united states as the goods and labour markets are less “ contestable ” and outsiders find it harder to compete. and in the labour market, there is a strong downward rigidity on wages. structural rigidities have complex effects on inflation and monetary dynamics. in the very short run, price rigidity may somehow protect the economy against deflationary shocks and, more generally, increase the output