m1 was 11. 8 % in october 2009, down from 12. 8 % in september, mainly reflecting a base effect. the current decline in the annual growth rates of monetary aggregates is influenced by a number of special factors and is thereby likely to overstate the deceleration in the underlying pace of monetary expansion. first, base effects associated with the intensification of the financial turmoil in autumn 2008 have had a downward effect on the annual growth rate of m3 in the past two months. second, and more fundamentally, the steep slope of the yield curve provides an incentive to shift funds out of m3 into longer - term deposits and securities, thereby dampening m3 growth. the current constellation of interest rates also continues to trigger shifts of funds within m3, as the narrow spread between the rates on different shortterm deposits reduces the opportunity costs of holding the most liquid assets contained in m1. the annual growth rate of bank loans to the non - financial private sector turned somewhat more negative in october. in the case of loans to households, the latest data provide further confirmation of a levelling - off at low rates of growth. as regards loans to non - financial corporations, it is worthwhile to note that the growth of loans to enterprises typically picks up with some lag compared with the cycle in economic activity. in this respect, the still subdued levels of production and trade, as well as the ongoing uncertainty surrounding the business outlook, are likely to dampen firms ’ demand for bank financing also in the coming months, especially for short - term loans. at the same time, overall financing conditions continue to improve, which should support the demand for loans in the period ahead. banks are currently faced with the challenge of managing the size and structure of their overall balance sheets, and at the same time ensuring the availability of credit to the non - financial sector. against the background of their improved liquidity situation and access to market financing, banks should address this challenge by taking appropriate measures to strengthen further their capital bases and, where necessary, take full advantage of government support measures for recapitalisation. to sum up, the current rates remain appropriate. taking into account all the information and analyses that have become available since our meeting on 5 november 2009, price developments are expected to remain subdued over the policy - relevant horizon. the latest information also confirms the expected improvement in economic activity in the second half of this year, with euro area real gdp growth returning to positive territory in the third quarter of 2009. however,

of the policy makers and practitioners to find the right solutions for various groups of people. ladies and gentlemen, i truly believe that this seminar would allow an invaluable opportunity for us to learn how to solve these puzzles from honorable speakers who have come a long way to share with us their enriching experiences and lessons - learnt. the achievement of effective financial education and behavioral change would eventually drive the global community towards a more financial - literate and disciplined population who would help ensure sustainable growth and equality in our society. lastly, i wish the seminar a great success. i also wish to express my sincere appreciation for all of your endless efforts in promoting financial inclusion and financial literacy. thank you. bis central bankers ’ speeches