2. 5 % for 2012, between 1. 1 % and 2. 1 % for 2013 and between 0. 6 % and 2. 2 % for 2014. compared with the september 2012 ecb staff macroeconomic projections, the projection range for 2013 has been revised downwards. in the governing council ’ s assessment, risks to the outlook for price developments are seen as broadly balanced, with downside risks stemming from weaker economic activity and upside risks relating to higher administered prices and indirect taxes, as well as higher oil prices. turning to the monetary analysis, the underlying pace of monetary expansion continues to be subdued, taking into account developments over several months. most recently, the annual growth rate of m3 increased to 3. 9 % in october, from 2. 6 % in september, while m1 growth accelerated to 6. 4 % from 5. 0 % over the same period. these developments are partly due to a specific transaction leading to an increase in overnight deposits belonging to the non - monetary financial sector. at the same time, deposits from households and non - financial corporations also rose in october. overall, more observations are needed to distinguish between shorter - term volatility and more lasting factors. unlike in the case of monetary developments, there has been little change in credit growth. the annual growth rate of loans to the private sector ( adjusted for loan sales and securitisation ) remained at – 0. 4 % in october, unchanged from september. but this development reflects further net redemptions in loans to non - financial corporations, which led to an annual rate of decline in these loans of – 1. 5 %, down from – 1. 2 % in september. the annual growth in mfi lending to households remained unchanged at 0. 8 % in october. to a large extent, subdued loan dynamics reflect the weak outlook for gdp, heightened risk aversion and the ongoing adjustment in the balance sheets of households and enterprises, all of which weigh on credit demand. furthermore, in a number of euro area countries, capital constraints, risk perception and the segmentation of financial markets restrict credit supply. in order to ensure an adequate transmission of monetary policy to the financing conditions in euro area countries, it is essential to continue strengthening the resilience of banks where needed. the soundness of banks ’ balance sheets will be a key factor in facilitating both an appropriate provision of credit to the economy and the normalisation of all funding channels. decisive steps for establishing an integrated financial framework will help to accomplish this objective

it has created hold regular competitive events like the hackathon to provide a channel for the fintech and start - up sector to showcase innovations. non - disruptive innovation 7. no regulator has the luxury of letting innovation disrupt the financial system in the hope that market might reach its own equilibrium eventually. for instance, we cannot afford to let loose defi technologies on the financial institutions with virtually no understanding of how a bank - less system would operate. apart from the unacceptable financial stability risks, this would amount to a regulator working towards its own irrelevance. it is necessary that a regulator controls the manner and pace of absorption of new technology. allowing disruptive technology without clarity on whether the alternative is even feasible, let alone desirable, would be an unacceptable gamble. a key element for smooth absorption of new technology is to ensure a level playing field. if offering credit cards requires a banking ( or similar ) licence, allowing a non - licensed entity to offer them would amount to undermining the banking system, as it would be placed at a competitive disadvantage. similarly, digital payments are essentially a banking service in the sense that they involve movement of funds from one deposit account to another. deposit accounts are a necessity, technology merely a tool ; deposit accounts can be used to make payments even without technology, but not the other way round. facilitating a non - bank to use its technology to move bank deposits would amount to creating a competitive edge for the non - bank. it may be argued that nonbanks could avoid use of bank deposits by maintaining deposit like funds, say, wallets. then non - banks would be deposit taking entities, that is, they would be effectively banks which would require a banking licence. a less disruptive and more efficient mechanism is to facilitate banks to collaborate ( or acquire ) the new technology. banks could also outsource or internalise the new technology. would it disincentivise innovation? not likely, if the non - bank technology is appropriately priced. 8. this brings us to the key issue of regulatory arbitrage. if we want to avoid the inefficiencies caused by differential regulations for similar activities, a non - bank undertaking banking functions, needs to be licensed and regulated like a bank. without the license, it should not be allowed to undertake banking activities. this for example, is what rbi did recently when it clarified that ppis ( prepaid payment instruments ) cannot be funded out of credit lines, because it enabled an