The slowdown was unexpected, although our forecast in July pointed to modest growth in the US economy in the coming period. Indicators for the third quarter are rather mixed so far. For example, unemployment increased somewhat in July, but at the same time employment increased at a relatively strong rate. Consumption was weak in the second quarter, and sales of motor vehicles fell in July. However, the situation on the housing market appears to be improving. For instance, some indicators point to a continued rise in housing prices. Unexpectedly strong second quarter in Sweden While developments abroad have been weak, the Swedish economy has continued to be surprisingly strong during the summer. At the end of July, a first preliminary compilation of National Accounts figures for the second quarter was released. This showed that GDP, when seasonally-adjusted, increased by 1.4 per cent compared with the first quarter, corresponding to 5.7 per cent when calculated as an annual rate. This was a much stronger figure than we and other forecasters were expecting. It was primarily a stronger growth in investments in stock, and to some extent exports, that came as a surprise. The labour force survey statistics show that the number of persons employed continued to rise in June, both in relation to the corresponding period last year and compared with May this year, seasonally adjusted. Unemployment adjusted for seasonal effects was 7.5 per cent. The inflation rate in June and July remained low, which was expected.

Accordingly, the defining of effective information and analysis co-operation and exchange procedures between the Supervisory and Resolution Boards is crucial for preventing dysfunctions, overlaps and frictions that hamper the proper functioning of the Banking Union. A Memorandum of Understanding between both agencies is currently being drawn up and will, I hope, contribute to achieving the necessary coordination. Lastly, we should sustain our efforts in order to achieve the degree of cohesion between the various components of the SSM that effective supervision requires. The SSM directly supervises 122 European banking groups, encompassing some 1,200 institutions. This is done with supervisory teams that draw on staff from various institutions, with highly diverse skill sets, seniority, experience and working conditions. Evidently, we must strive to fully develop a sense of mission to which all the component parts must contribute, under the leadership of the ECB and its Supervisory Board, without exclusions or unnecessary subordination. That is vital for maintaining the motivation and commitment of all SSM supervisory staff, irrespective of the authority to which they are attached. Indeed, they have to date shown exceptional professionalism. Final remarks In concluding, I will say that the past year has seen major headway in setting the Banking Union in place, but we still have some way to go. We must move ahead in a setting that will be complex for the European banking industry. Specifically, economic activity remains relatively sluggish, price stability is subject to significant risks and, as a result of this, interest rates are holding at very low levels.