chosen to focus our supervisory efforts in five specific areas. the first concerns banks ’ business models. at the heart of our work lies the question of the consequences that the sustained period of low interest rates will have for the various institutions and their business models. if they are forced to adjust their business models, banks could potentially move into riskier areas in search of yield. that would increase not only the risk of bubbles in financial markets, but also the level of risk within individual banks. we will therefore be looking very closely to see whether banks are adjusting their business models, what direction they are moving in, and what risks that involves. our second priority concerns credit risks. we are continuing to see large stocks of nonperforming loans in certain banks. in order to address this problem at european level from a supervisory perspective, we established a dedicated working group last year. that working group has been tasked with developing and implementing a consistent supervisory approach aimed at supporting a reduction in those large stocks of non - performing loans. however, this bis central bankers ’ speeches second priority is not just about non - performing loans ; it is also about cluster risks – the concentration of exposures in specific sectors, such as the property sector. the third priority is banks ’ capitalisation. it is clear that banks have significantly increased their capital since the crisis ; and from our perspective, the capitalisation of the european banking system as a whole is satisfactory. our focus will be on two things. first, we will be looking at the new requirements concerning the capital components that absorb losses in the event of a bank becoming insolvent. “ tlac ” and “ mrel ” will be the key terms in this respect. second, we will again be looking very closely at what exactly constitutes capital, as well as establishing an overview of the banks ’ internal models and processes used to determine the capital requirements. the fourth priority is banks ’ internal risk management. against the background of low interest rates, cheap refinancing and low profitability, it is increasingly important that banks manage risk in an appropriate manner. to do that properly, managers need sound data on which to base their decisions. we will therefore be formulating specific requirements concerning risk management and data quality. our fifth priority will be banks ’ liquidity. the 2008 financial crisis showed how dangerous liquidity problems can be – not just for individual banks, but for the financial system as a whole. some banks are failing to meet our expectations in terms of the management of

stability. in the light of the medium - term orientation of the eurosystem ’ s monetary policy, the rising trend of m3 growth calls for great vigilance on the part of monetary policy. the recent increase in oil prices will continue to impose additional upward pressure on the hicp. seen in isolation, the increase in energy prices should have only a temporary effect upon consumer price increases, but it is essential that this effect does not trigger wage claims which prove incompatible with price stability in the medium term. against the background of the medium - term outlook for a sustained acceleration in economic activity, decisive structural reform is warranted in order to prevent early upward pressure on prices. in fact, the governing council sees a strong case for enhancing structural reform in labour and product markets. the anticipation of an expected cyclical improvement should not lead to a weakening of efforts in this regard, but rather it should be used as a welcome opportunity to make convincing progress. this, together with continued wage moderation and fiscal adjustment in line with the stability and growth pact, would greatly facilitate the monetary policy task of maintaining price stability in an environment of stronger growth. let me now give the floor to the vice - president to introduce three additional topics which we discussed during our meeting : in addition to reviewing the main monetary, financial and other economic indicators, the governing council formally adopted the decision of the ecb on fraud prevention, according to which an independent anti - fraud committee will be established to enforce an anti - fraud scheme within the ecb. the committee will be composed of three independent persons of recognised standing and professional experience in the fields of central banking, justice and policing. within the ecb, the directorate internal audit is entrusted with the task of conducting all investigations relating to fraud prevention and detection. for the purpose of combating fraud, the director of internal audit will report to the anti - fraud committee. a cooperative relationship will be established with the european anti - fraud office ( olaf ). as i already emphasised at the last press conference, the ecb shares the concerns of the european parliament, the eu council and the european commission about the need to combat fraud and other activities detrimental to the financial interests of the communities and the ecb. you will find further information relating to this decision in the separate press release which has been issued today. i should also like to mention that the governing council had a preliminary discussion on eu accession countries. the accession of new members to the european union is an area of development in which the