business sentiment worsened further, falling to new all - time lows in february. moreover, labour markets have deteriorated which does not bode well for consumer spending. in this context, let me stress that we in the ecb governing council anticipated in our interest rate decisions that there will be bad news to come for the first quarter of 2009, as we take our decisions in a forward looking manner. once these expectations of further weakness in growth are confirmed by official data, we will not to take it into account again – there is no double counting! looking ahead, we expect a protracted period of further weakness in euro area activity. we have to face the truth that 2009 will be a very difficult year. it will be a year of balance sheet adjustments across banks, non - financial companies and private households. this could be a further drag on investment and consumer spending, already negatively affected by very low global demand, tight financing conditions and, in the case of private consumption, a further deterioration in labour markets. however, these corrections are inevitable as they lay the foundation of the gradual recovery. this is also reflected in the march 2009 ecb staff macroeconomic projections. the expected negative or very low annual gdp growth in 2009 and 2010 somehow masks these developments as it is affected by negative carry - over effects of the previous year. looking beyond the annual growth numbers, the underlying quarterly profile embodies expectations of increasingly positive quarterly rates of growth in real gdp over the course of 2010. underlying this outlook is the expectation of a gradual improvement of the external environment and a normalisation in financial markets, reflecting the extensive policy measures that have been introduced to restore the functioning of the financial system, both inside and outside the euro area. this together with low inflation rates which strengthen real incomes and the strong fiscal and monetary stimulus should support the gradual recovery in euro area activity. in our view, the economic outlook remains surrounded by uncertainty. the risks to economic growth appear now to be more balanced. on the one hand, there may be stronger than anticipated positive effects, also on confidence, stemming from the extensive macroeconomic stimulus under way and reflecting other policy measures taken. on the other hand, concerns relate mainly to the potential for the turmoil in financial markets to have a stronger impact on the real economy, as well as to the emergence and intensification of protectionist pressures and to possible adverse developments in the world economy stemming from a disorderly correction of global imbalances. c. euro area price developments let me turn to

, and many other countries. • in general, there has been one central securities depository ( csd ) per country providing custody services. csds were often established by the law and were given a legal monopoly in the local market. the transfer of securities was taking place in the books of the csd and the transfer of cash on the accounts of the central bank. this structure resulted from legal provisions, but also contributed to economic efficiency by allowing scale and network effects. • the csd was generally closely connected with the trading, clearing and settlement system in a vertically integrated structure, usually based on common ownership. services were provided in two layers. the csd provided clearing, settlement, safekeeping and other services to its settlement members. in turn some of these members, also called " custodians ", provided the same services to end - users and offered additional value - added services, such as credit facilities or securities lending services. finally central counterparties ( ccp ) used to limit the provision of netting facilities to derivatives products. • the world that i have just described is no longer the one of today. what are the forces driving the change? how do they affect the market players and the market structure? on these i would like to provide some views. • the main forces that are reshaping the securities industry are : technological progress, deregulation, and globalisation. in the euro area, the euro is an additional, very powerful, force, which, in my opinion, makes the pace of change much faster. as a result, there are several " trends " in the market structure that need to be considered. • a first trend is the increasing blurring of specialisation, i. e. of the borderline between the roles and services of different market players : custodians, clearinghouses and ( i ) csds. all market players are seeking to provide new services and to reach new markets. every player has become a potential competitor to all the others. for instance, csds are establishing links between each other and acting as custodians to one another. custodians are increasingly providing settlement functions. international central securities depositories ( icsds ) are merging with domestic csds and have started providing credit and securities lending facilities. central counterparties are expanding their services to all securities markets. • a second trend is the struggle to be at the centre. the legal monopoly csds have traditionally had is no longer a guarantee that these institutions