The development of the broadly defined monetary aggregates, which react promptly and vigorously to interest rate changes, confirmed the picture presented by the monetary base. Already beginning in spring 1995, the decline in money market rates had led to a massive expansion of sight and savings deposit liabilities in the banking system to the detriment of time deposits. This development was interrupted by a temporary rise in interest rates in spring 1996. Nevertheless, all the broadly defined aggregates rose vigorously: in 1996 the money stock M1 exceeded the previous year's level by 11.9% on average, the money stock M2 expanded by approximately 12.2%, while the money stock M3 increased by 7.2%.
