of 2003, though only slowly. at the same time, the growth of loans to the private sector has been edging up. both monetary and credit growth seem to be supported by the low level of interest rates prevailing in the euro area and may also reflect the improvement in the economic environment since the summer of 2003. given the strong m3 growth over the past few years, there is currently more liquidity in the euro area than is needed to finance non - inflationary growth. the effects of this high liquidity on inflation over the medium term will greatly depend on future developments in the economy and financial markets. should excess liquidity persist, it could lead to inflationary pressures over the medium term. to conclude, the economic analysis continues to indicate that the outlook for price developments in the medium term is in line with price stability. cross - checking with the monetary analysis does not alter this picture. let me also make a few remarks on other policies in the euro area. with regard to fiscal policies, the governing council sees continued reasons for concern. recent information indicates that significant imbalances are emerging in a growing number of countries and that current policies would not be sufficient to attain the consolidation objectives specified in the latest stability programmes. we strongly urge governments to take corrective action in a timely and sustained fashion, where and when necessary. finally, with regard to structural reforms, the governing council welcomed the presidency conclusions of last weekend ’ s brussels european council. structural reforms are necessary to meet the lisbon challenge and thus reap the benefits of higher sustainable growth and employment. as pointed out by the european council, the pace of reform needs to be significantly stepped up and the critical issue now is the need for better implementation of commitments already made. ending the political uncertainty and delays surrounding the implementation of sustainable fiscal policies and effective structural reforms would indeed support private sector confidence, which would add momentum to the economic recovery in the euro area, given the supportive stance of monetary policy. we are now at your disposal for questions.

##isation, indicators of international financial trade increased from the early 1990s until the global financial crisis and have subsequently stabilised since then in proportion to global output ( chart 4 ). as shown in my work with gian maria milesi - ferretti, the expansion in external assets was concentrated in positions vis - a - vis international financial centres, which in turn are linked to the corporate structures of mnes. chart 4 evolution of external assets ( percentages of world gdp ) sources : external wealth of nations database ( lane and milesi - ferretti ) and ecb staff calculations. notes : aggregates for advanced economies, financial centres and emerging and developing countries are defined as in lane, p. r. and milesi - ferretti, g. m. ( 2018 ), “ the external wealth of nations revisited : international financial integration in the aftermath of the global financial crisis ”, imf economic review, vol. 66, no 1, international monetary fund, pp. 189 - 222. gross foreign direct investment ( fdi ) transactions of euro area countries with financial centres have been so large that these have driven aggregate euro area developments. euro area fdi also exhibits a strong correlation between gross assets and liabilities, especially in financial centres, which points to the importance of the pass - through of financial flows for the evolution of fdi data. the challenge in interpreting headline fdi data is further compounded by the large presence of spes in a number of euro area countries. spes account for sizeable shares of cross - border financial transactions and positions in fdi. statistics on spes, however, remain underdeveloped, since these do not follow a harmonised international definition and data are systematically collected only for a limited set of countries. the limitations of cross - border statistics also make it difficult to analyse properly international financial exposures. [ 8 ] although data on international financial transactions and positions have improved significantly over the past decade ( in terms of coverage and details available on instruments, sectors and geographic breakdowns ), visibility on the links between ultimate investors and ultimate issuers of financial instruments remains limited. [ 9 ] the identification of ultimate exposures has been further complicated in recent years by the expansion of international financial intermediation chains, which often involve nonbank entities located in international financial centres. [ 10 ] a good example of this is the difficulty in measuring foreign currency exposures in international balance sheets – for which official statistics remain sparse – although research - based data