It must be forward looking, connected, proportionate, predictable, transparent and agile: Forward-looking because, although we need to learn from history, we need to prioritise regulating for the future, especially as the pace of change means it quickly becomes the present; Connected because, in a European and global financial market, being more connected with market participants – whether firms, other regulators, consumers and investors – is essential to better understand risk, and to support agility and foresight in how we regulate; Proportionate, because we want regulation to address the harm or failure on which it is aimed without causing unintended consequences.
As regards the first pillar, the three-month average of the annual growth rates of M3 was 5.9% in the period from May to July 2001. This figure, however, has to be carefully analysed. First, the figure needs to be corrected for holdings of money market paper and short-term debt securities by nonresidents of the euro area.