This moderation can be explained in part by an apparent resumption of the unwinding of past portfolio shifts, which exerts a dampening effect on headline M3 growth. However, the trend rate of monetary expansion remains strong, reflecting the stimulative impact of the prevailing low level of interest rates.
Overall, strong monetary and credit growth in a context of already ample liquidity in the euro area points to risks to price stability over the medium to longer term. Cross-checking the monetary analysis with the economic analysis therefore supports the case for vigilance to ensure that the risks to price stability over the medium to longer term do not materialise.