and electronic media must have had some dampening effect on expectations, as some surveys have suggested. it would not be surprising if the household sector had become more sensitive to news about interest rates, given the increased debt and debt servicing loads that it is now carrying. to cut a long story short, the next set of producer and consumer price inflation data that we received was more reassuring. true, it was only one quarter's information and that was not enough to change our numerical forecast of inflation, but it did lead us to conclude in our may statement on monetary policy that there was no longer an upward risk to our inflation forecast. the subsequent set of data confirmed a similar picture. with two quarterly sets of more reassuring price data now behind us, we were able in our recently released august statement on monetary policy to conclude that the cpi increase will peak at 3 per cent per annum in the second half of next year. as was widely noticed, we also refrained from making the point we have been making for the past year or so about it'being unlikely that there would be no further rises in the course of the expansion '. that does not mean that further rises could not happen ; it only means that in our present estimation there is no longer a more than 50 per cent possibility of it happening. this is a pretty comfortable position in which to be. we are not expecting to change monetary policy in the near term, and when we look further into the future we no longer see a clear probability of it moving in one direction rather than the other. importantly, this is also the collective view of the market, as shown by the yield curve and by economists'forecasts. of course, individuals do not all share this view, but on average that is the collective forecast. i do not intend to say any more about the economy or monetary policy at this stage, but, of course, am happy to answer any questions that you have on these subjects. i am also happy to answer any questions on the other important area of the bank's responsibilities, namely financial system stability. within that general area, the subject that has attracted the most recent attention has been the regulation of the retail payments system by the bank's payments system board. i know that committee members have met with the various industry participants, including members of the bank's payments policy department, to discuss the main issues, and, of course, i would be happy to address any questions members have on that subject.

supervised in 4 different divisions in the ssm ; two of these divisions are in dg i and two in dg ii. except for the jst coordinator in frankfurt, jst members for these banks will be from our banking supervision directorate led by sharon donnery and working here at the central bank. the day to day work, the on - site inspections and most of the supervisory engagement will continue to be performed by sharon ’ s teams. for the jsts to become effective and operational there will obviously have to be much dialogue, cooperation and information sharing. some of this information sharing has commenced but the process is at its infancy and jsts are only now becoming formed. bis central bankers ’ speeches jst coordinators for irish banks will come soon to dublin to meet with central bank staff, learn about these institutions, their risk profiles and current issues. they will also meet with the institutions that they will be directly responsible for. you can expect to hear from your new supervisory team shortly. less significant institutions while the significant institutions undergo this change to their supervisory personnel, the other less significant institutions, or “ lsis ”, which we supervise will continue to be supervised directly with us here in dublin. we will not adopt this jst structure for them. when we talk of less significant institutions i would like to make the point that it does not mean lower risk or, less important. in fact, very often smaller institutions may carry more risk insofar as systems, controls and governance are concerned but the impact of that risk crystallising is not as significant on the eu wide financial landscape. yet these institutions are often essential to the provision of services to the economy, consumers, business or to other sectors. we will continue our direct supervision of these less significant institutions. we will retain the responsibility for supervision but the ecb will have oversight, through dg iii led by mr jukka vesala. this will ensure a harmonised approach and consistency of quality. what will change is that, just like for significant institutions, we will move away from our current prism engagement model as we will now supervise in accordance with the ssm supervisory manual. the imf, in its report on the observance of standards and codes ( rosc ), issued in the beginning of this year, invited the central bank to review its supervisory engagement and its mix of onsite and offsite supervision for medium low and low impact banks. the fund recommended that the analysis of regulatory returns should be strengthened as