upside risks relate to higher commodity prices and stronger than expected increases in administered prices and indirect taxes, while downside risks stem from weaker than expected economic activity. concerning the staff macroeconomic projections, let me inform you that the governing council has decided to publish more details as of december 2013. you will receive this material today after the press conference. turning to the monetary analysis, data for october confirm the assessment of subdued underlying growth in broad money ( m3 ) and credit. annual growth in m3 moderated to 1. 4 % in october, from 2. 0 % in september. this moderation was partly related to a base effect. annual growth in m1 remained strong at 6. 6 %, reflecting a preference for liquidity, although it was below the peak of 8. 7 % observed in april. net capital inflows into the euro area continued to be the main factor supporting annual m3 growth, while the annual rate of change of loans to the private sector remained weak. the annual growth rate of loans to households ( adjusted for loan sales and securitisation ) stood at 0. 3 % in october, broadly unchanged since the beginning of the year. the annual rate of change of loans to non - financial corporations ( adjusted for loan sales and securitisation ) was – 2. 9 % in october, following – 2. 8 % in september and – 2. 9 % in august. overall, weak loan dynamics for non - financial corporations continue to reflect their lagged relationship with the business cycle, credit risk and the ongoing adjustment of financial and non - financial sector balance sheets. since the summer of 2012 substantial progress has been made in improving the funding situation of banks. in order to ensure an adequate transmission of monetary policy to the financing conditions in euro area countries, it is essential that the fragmentation of euro area credit markets declines further and that the resilience of banks is strengthened where needed. the ecb ’ s comprehensive assessment before it adopts its supervisory role under the single supervisory mechanism will further support this confidence - building process. it will enhance the quality of information available on the condition of banks and result in the identification and implementation of necessary corrective actions. further decisive steps to establish a banking union will help to restore confidence in the financial system. to sum up, the economic analysis indicates that we may experience a prolonged period of low inflation, to be followed by a gradual upward movement towards inflation rates below, but close to, 2 % later on. a cross - check with

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