mr noyer considers the role of the central bank in encouraging and safeguarding savings speech given by mr christian noyer, vice - president of the european central bank, at the eurofonds colloquium in paris, held on 21 january 2000. * * * ladies and gentlemen, it is a great pleasure to be taking part in this eurofonds colloquium on savings. i should like to take this opportunity to share with you some thoughts on the role of a central bank in encouraging and safeguarding savings. this is indeed a crucial matter, since the level of savings largely determines the long - term level of productive investment, which provides the basis for solid and stable growth. moreover, the level and structure of savings affects, in various ways, the cost and means of financing enterprises, the profitability of the financial sector and the distribution of income between generations in view of the central issue of financing retirement. i should like to focus my presentation, as i am sure you will understand, not on the central bank in theory but on the role of the eurosystem in this field, that is, the european central bank and the 11 national central banks of the euro area. in addition, i shall say a few words on the impact of the launch of the euro on the development and safeguarding of savings in europe. i shall therefore develop two points : • by safeguarding price stability, the eurosystem contributes to the safeguarding and consolidation of savings. • the creation of the euro is leading to larger and more integrated financial markets, improving the allocation of financial savings. 1. by safeguarding price stability, the eurosystem contributes to the safeguarding and consolidation of savings. the primary objective of the monetary policy of the eurosystem, as laid down in the treaty, is price stability. this objective is founded on the conviction that price stability makes it possible to ensure the full efficiency of the price mechanism and to avoid both arbitrary redistribution of wealth as a result of inflation as well as the costs and distortions caused by uncertainty and periodical adjustments of nominal values. these positive effects of price stability obviously benefit savings. i personally see three aspects to this : an effect on the protection of the value of savings, an effect on their structure and allocation, and finally an effect on the distribution of saving within society. first, by aiming at price stability, monetary policy directly preserves the real value of a large proportion of financial savings. this is immediately obvious in the case of fidu

s mandate to pursue price stability and to contribute to safeguarding financial stability. we stand ready to adjust all of our instruments within our mandate, incorporating flexibility if warranted, to ensure that inflation stabilises at our two per cent target over the medium term. 1. the march 2022 ecb staff macroeconomic projections included adverse and severe scenarios in addition to the baseline projections in recognition of the highly - uncertain impact of the war on the euro area economy and the inflation outlook. 2. adrjan, p. l and lydon, r. ( 2022 ), “ job posting growth stalls in europe ” indeed hiring lab blog, 4 may. 3. see also lane, p. r. ( 2022 ), “ monetary policy during the pandemic : the role of the pepp ”, speech at the paris school of economics, 31 march, lane, p. r. ( 2022 ), “ inflation in the near - term and in the medium - term ”, opening remarks at mni webcast, 17 february and lane, p. r. ( 2022 ), “ bottlenecks and monetary policy ”, the ecb blog, 10 february. 4. wage agreements specify both current and future wage increases and frequently cover 1 - 2 years. the wage trackers reflect the average wage growth among those workers for whom agreements are already in place – the so - called coverage. this coverage is decreasing with the length of the time horizon – as the longer one looks into the future the more agreements will have run out. the experimental wage tracker for the euro area reflects a weighted average of wage increases based on micro data on wage agreements in germany, italy, spain and the netherlands. 5. for more than half of the private sector employees in the euro area, inflation does not play a formal role in wage setting, but can be an important factor in wage negotiations and in some countries there is renewed pressure to introduce or increase the prevalence of indexation clauses. see, for example, ecb ( 2022 ) “ an initial analysis of the impact of inflation on collective bargaining in 2022 ”, bank of spain economic bulletin, issue 1see also ecb ( 2021 ) “ the prevalence of private sector wage indexation in the euro area and its potential role for the impact of inflation on wages ” economic bulletin, issue 7. 6. also substantial increases in minimum wage increases, which are in some countries linked to inflation, can be expected to contribute more