european central bank : press conference a€ “ introductory statement introductory statement by mr willem f duisenberg, president of the european central bank and mr christian noyer, vice - president of the european central bank, at the press conference, held in vienna, 11 october 2001. * * * ladies and gentlemen, the governing council of the european central bank met today for the fourth time outside frankfurt. let me first of all thank our host, governor liebscher, and the staff of the oesterreichische nationalbank, for the invitation to vienna and for the generous hospitality offered to us. as usual, the governing council conducted its examination of monetary and economic developments and analysis of their implications for the maintenance of price stability in the euro area. based on its assessment under both the first and second pillar, the governing council decided to keep the key ecb interest rates unchanged. the level of the key ecb interest rates at the current juncture is therefore seen as consistent with maintaining price stability over the medium term. given the high level of uncertainty in the international environment, we will continue to monitor developments very closely and thoroughly, and we will assess new information in the context of our medium - termoriented monetary policy strategy aimed at delivering price stability in the euro area. let me elaborate somewhat on the assessment provided under the two pillars of the monetary policy strategy of the ecb. looking at the first pillar, we have seen a strong increase in m3 growth over the past few months. however, a number of temporary factors play an important role in explaining recent monetary developments. notably the uncertainty in stock markets and the relatively flat yield curve until august have led to portfolio shifts by private investors from longer - term assets to short - term assets included in m3. furthermore, the growth of credit to the private sector continued to slow down in august. for these reasons, we do not judge that monetary developments signal risks to price stability at this juncture. this notwithstanding, the developments of m3 will have to be monitored carefully in the coming months. as regards the second pillar, the assessment is currently surrounded by a particularly high degree of uncertainty. this concerns in particular the international environment. last month's terrorist attacks had a negative impact on economic activity and confidence, which could delay the resumption of higher economic growth. against this background, it was important that policy - makers in the united states, the euro area and in other countries around the world acted with measures to support confidence. a further positive feature is

account of the views of market participants and other interested parties with views on the volcker rule, including what is working and what is not. we expect this process will proceed with dispatch. we must also work within the confines of the statute. for example, a number of my current and former federal reserve board colleagues have expressed support for congress providing an exemption from the volcker rule for community banks, which is something i also support. 5 short of a statutory exemption, we can only do our best to mitigate burden on community banks that generally do not engage in the types of activities the volcker rule was intended to cover. 6 statutory changes likely would make our work of streamlining more straightforward and complete, but we have a fair bit that we can accomplish even absent such changes. what are some of the improvements that we are thinking about that would be possible within the regulation itself? as an initial matter, it should be clearer and more transparent what is subject to the volcker rule ’ s implementing regulation and what is not. the definition of key terms like “ proprietary trading ” and “ covered fund ” should be as simple and clear as possible. it should not be a guessing game or require hours of legal analysis of complex banking and securities regulations to determine if a particular entity is a covered fund. it should not happen — although it has happened — that our supervised firms come to us and ask questions about whether a particular derivative trade is subject to the rule, and we cannot give them our own answer or a consistent answer across the five responsible agencies. supervisors need to be able to provide clear and transparent guidance on what is covered by the volcker rule and what is not. this would benefit not only the firms, but the supervisors at the agencies as well. again, a good example is the exemption for market making - related activities, which is one of the key exemptions from the prohibition on proprietary trading. the rule contains a gaggle of complex regulatory requirements, but the statute contains merely one — that the market making - related activities are designed not to exceed the reasonably expected near - term demands of clients, customers, or counterparties, otherwise known as rent ’ d. 7 we are considering different ways to use a clearer test for rent ’ d. we want banks to be able to engage in market making and provide liquidity to financial markets with less fasting and prayer about their compliance with the volcker rule. as i noted earlier, we also understand that the volcker rule has had an extra