european central bank : press conference – introductory statement introductory statement by mr jean - claude trichet, president of the european central bank, and mr vitor constancio, vice - president of the european central bank, frankfurt am main, 10 october 2010. * * * ladies and gentlemen, the vice - president and i are very pleased to welcome you to our press conference. we will now report on the outcome of today ’ s meeting. based on its regular economic and monetary analyses, the governing council continues to view the current key ecb interest rates as appropriate. it therefore decided to leave them unchanged. considering all the new information and analyses which have become available since our meeting on 2 september 2010, we continue to expect price developments to remain moderate over the policy - relevant medium - term horizon. recent economic data are consistent with our expectation that the recovery should proceed at a moderate pace in the second half of this year, with the underlying momentum remaining positive. at the same time, uncertainty is still prevailing. our monetary analysis confirms that inflationary pressures over the medium term remain contained, as suggested by weak money and credit growth. we expect price stability to be maintained over the medium term, thereby supporting the purchasing power of euro area households. inflation expectations remain firmly anchored in line with our aim of keeping inflation rates below, but close to, 2 % over the medium term. the firm anchoring of inflation expectations remains of the essence. overall, the current monetary policy stance remains accommodative. the stance, the provision of liquidity and the allotment modes will be adjusted as appropriate, taking into account the fact that all the non - standard measures taken during the period of acute financial market tensions are fully consistent with our mandate and, by construction, temporary in nature. accordingly, the governing council will continue to monitor all developments over the period ahead very closely. let me now explain our assessment in greater detail, starting with the economic analysis. euro area real gdp grew strongly on a quarterly basis, increasing by 1. 0 % in the second quarter of 2010, supported mainly by domestic demand, but partly reflecting temporary factors. recent statistical releases and survey evidence generally confirm our expectation of a moderation in the second half of this year in the euro area and elsewhere. nevertheless, the positive underlying momentum of the recovery in the euro area remains in place. the global recovery is expected to go on, and this should imply a continued positive impact on the demand for euro area exports. at the same time

follow our current capital framework in the united states or to " opt in " to the advanced basel ii approaches. if you decide to opt in, you will have to meet the same qualification requirements as domestic organizations. the new basel ii rules are expected to take effect on january 1, 2008. to qualify by that date, both supervisors and bankers have substantial work to accomplish. currently, we are reviewing the submissions received from various banking organizations as part of a quantitative impact study, qis - 4, to assess the effects of basel ii rules on bank capital levels. this summer, the agencies will issue a notice of proposed rulemaking ( npr ) for basel ii. we will also issue for comment, amendments to the existing capital framework. thus, bankers will be able to compare the two alternatives and to evaluate which is appropriate for their u. s. operations. in the run - up to 2008, institutions subject to the new rules will be required to conduct a year of parallel calculations ; that is, institutions will have to perform a dress rehearsal, if you will, to demonstrate not only that the design of the basel ii systems is sound but also that the rules can be practically implemented. as you know, the federal banking agencies in the united states have stated that a small number of large, internationally active banking organizations will be required to follow the advanced approaches of calculating capital under basel ii. a year and a half ago, we proposed setting the threshold at $ 250 billion or more in total banking assets or $ 10 billion or more in foreign banking assets. the criteria in the forthcoming notice of proposed rulemaking are unlikely to differ materially from those levels. at the same time, u. s. regulators - especially those among us who spent the greater part of our careers as bankers - are very sensitive to the competitive implications of having two sets of rules for the banking industry. regulators recognize that basel i can be enhanced and that the basel ii standardized approach is not well suited to the needs of our domestic - focused community banking organizations. accordingly, we are now seriously considering making some targeted adjustments to our existing regulatory capital rules and looking for ways to enhance their risk sensitivity without increasing regulatory burden. the staffs of the agencies are drafting an advance notice of proposed rulemaking ( anpr ) suggesting possible changes to our existing capital rules. this advance notice will be published close to the publication of the basel ii notice of proposed rulemaking. finally, those institutions considering adoption of the advanced approaches at the earliest possible date should begin