. 2023 ). as a matter of facts, retail customers can already transfer deposits from a bank to another bank, sometimes in real time, or invest in a money market fund or government bonds, without limit. even during severe banking crises, many banks are considered safe ( mainly because central banks act as system - wide lenders of last resort ). for example, during the great financial crisis, but also during the recent us regional banking crisis, large banks benefited from capital inflows ( caglio et al. 2023 ; carletti et al. 2024 ). the same dynamic occurred during the 1930s crisis in france ( baubeau et al. 2021 ). the risks for bank deposits could in fact be reduced with cbdcs ( slide 15 ) : new players such as stablecoins, e - money institutions and other narrow banking constructs, some sponsored by bigtech companies with huge customer bases, do not care about banks and their role in the economy and pose a greater risk to bank funding than cbdcs. non - bank entities have no incentive to restrict the use of their stablecoins or the services they offer ( panetta 2023 ), and the use of stablecoins could become significant. 6 / 9 bis - central bankers'speeches by linking cbdcs with bank deposits ( especially with reverse waterfalls ), central banks will offer retail banks the possibility to retain their deposits by offering new services to their customers. in emerging economies and low - income countries, cbdcs will also substitute for banknotes for households and firms that do not have a bank account ( hence they will be neutral for deposits ). the conclusion is twofold : compared to the " good old times " of bank deposits and banknotes, the impact of cbdcs appears unclear and probably limited if appropriate safeguards are put in place. compared to a new world of bank deposits and private digital currencies, cbdcs are likely to be stabilizing, if linked to bank deposits with appropriate holding limits, and with additional digital services provided by the bank. let me briefly conclude ( slide 16 ). i have covered three topics raised by recent and future evolutions of the liquidity ecosystem : ( i ) the rise of new institutions ( nbfis ), ( ii ) the existence of excess reserves in the banks, and ( iii ) the prospects for retail cbdcs. these are likely to be three permanent changes. they require adjustments from commercial banks, central

and its successes. and i sincerely believe that our present monetary policy is very much in accordance with the german values that i fully share : independence, respect of the treaties, price stability and a long - term approach. contrary to what some critics suggest, our monetary policy is not some sort of latin fantasy. it is decided collectively by the council of governors and we take the mission entrusted to us – ensuring price stability – very seriously. this means ensuring that inflation is neither too high nor too low. overly high inflation would have disastrous consequences for the economy – as german history shows. excessively low inflation would have exposed us to deflation, a mortal danger as we know from the 1930s. in practice, price stability was defined by the council of governors as from 2003 as an inflation rate of close to, but below, 2 % over the medium - term. this definition has not changed and is now widely shared by all the central banks in developed countries, including the united states and the united kingdom. up to recent years, the stability of prices in the euro area was remarkable. however, as from 2013, inflation dropped to well below the 2 % mark. our mandate required us to respond so as to bring inflation back to healthier levels for our economies. b ) what is the situation today? inflation is gradually recovering in the euro area, as we had announced : we have gone from a fall of 0. 2 % in april 2016 to a rise of 1. 1 % in last december. this is partly due to the rebound in energy prices but is also the result of our monetary policy : it 1 / 4 bis central bankers'speeches has enabled us to ward off the risk of deflation which was still a threat in 2015. now in contrast, some seem to fear a resurgence of inflation ; this is very exaggerated. we have not yet reached our 2 % target and “ core ” inflation – excluding energy and food – is of only 0. 9 %. the other question mark concerns the differences between countries, with inflation of 1. 7 % in germany. however, following a temporary peak in the first quarter, german inflation is expected to remain under 2 % on average throughout 2017. moreover the inflation differences between countries are consistent with their different national economic situations : growth and employment are also stronger in germany ; and these differences could even contribute, via their impact on relative wages, to correcting the imbalances, hence achieving greater convergence within the euro area. i can naturally grasp the concern of