model of universal banking, which has historically served well the needs of the european productive sector. second, it could hinder the smooth provision of financial services in the european union, thus hampering the objective of further financial integration in the single market. third, in some cases, it might trigger unintended consequences such as the migration of riskier activities to less regulated and less capitalized areas of the financial system. hence, the functional separation does not seem the most promising way forward in the european context. rather, we should focus our efforts on enhancing and enlarging the perimeter of both supervision and, when warranted, regulations to a wider range of potentially riskier activities and institutions. politis : it is apparent that the global tendency now is for a more uniform regulatory framework. on a european level we even see steps to move towards euro rather than national regulators. but countries still insist on their own models. in cyprus we even have two supervising authorities for the banking sector. one for commercial banks and one for the cooperatives. what is the ecb ’ s position on this? trichet : the ecb considers that it is up to the member states to decide upon the national supervisory model they wish to adopt whilst fully respecting the necessary level playing field. it is also necessary that the cooperation and coordination between the national authorities, at the level of the eu as a whole, will be exemplary. the new european supervisory authorities, recently created and operational as soon as next year, must be fully effective. and the european systemic risk board – which will have the responsibility to identify the systemic risks at the level of the european union – will be operational next january. politis : you visited cyprus on the occasion of the 6th euro - mediterranean seminar, where eurosystem central banks meet their mediterranean counterparts. what are the aims and expectations of such a seminar? trichet : this forum is one of the major contact points between the eurosystem and the mediterranean central banks. after we had initiated it, we were happy to see that the colleague central banks were very keen to participate in a forum which accommodates an open discussion on issues related to central banking. our major stake, which we all share, is maintaining price stability over the medium and long term. this common stake creates an element of proximity. we are united in purpose, even though we may apply different specific policy measures targeted to our economies.

, only marginally up from the previous month. the annual growth in broad money – as measured by m3 – rose to 1. 6 per cent in may, from 1. 3 per cent in april. conclusion the governing council today decided to keep the three key ecb interest rates unchanged. we are determined to ensure that inflation returns to our two per cent medium - term target in a timely manner. we will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim. we will continue to follow a datadependent and meeting - by - meeting approach to determining the appropriate level and duration of restriction. in particular, our interest rate decisions will be based on our assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission. we are not pre - committing to a particular rate path. in any case, we stand ready to adjust all of our instruments within our mandate to ensure that inflation returns to our medium - term target and to preserve the smooth functioning of monetary policy transmission. we are now ready to take your questions. 3 / 3 bis - central bankers'speeches