european central bank : press conference – introductory statement introductory statement by mr jean - claude trichet, president of the european central bank, and mr lucas papademos, vice president of the european central bank, frankfurt am main, 6 september 2007. * * * ladies and gentlemen, let me welcome you to our press conference and report on the outcome of today ’ s meeting of the ecb ’ s governing council. the meeting was also attended by the president of the eurogroup, prime minister juncker, and commissioner almunia. on the basis of our regular economic and monetary analyses, we decided at today ’ s meeting to leave the key ecb interest rates unchanged. the information that has become available since our previous meeting has confirmed that the medium - term outlook for price stability remains subject to upside risks, as identified by both our economic and monetary analyses. incoming macroeconomic data also confirm the strong fundamentals of the euro area economy and support a favourable medium - term outlook for real gdp growth. against this background, our monetary policy stance is still on the accommodative side with, inter alia, money and credit growth vigorous in the euro area. at the same time, the financial market volatility and reappraisal of risk of recent weeks have led to an increase in uncertainty. given this high level of uncertainty, it is appropriate to gather additional information and to examine new data before drawing further conclusions for monetary policy in the context of our medium - term - oriented monetary policy strategy aimed at delivering price stability. accordingly, the governing council will monitor very closely all developments. on the basis of our assessment, and by acting in a firm and timely manner, we will ensure that risks to price stability over the medium term do not materialise and that medium - term inflation expectations remain firmly anchored in line with price stability. this is all the more important at times of financial market volatility and increased uncertainty. as regards the financial markets, we will continue to pay great attention to developments over the period to come. allow me to explain our assessment in greater detail, starting with the economic analysis. all in all, the data available suggest that economic activity in the euro area is continuing to expand at sustained rates. euro area real gdp growth in the second quarter moderated to 0. 3 % quarter on quarter, compared with 0. 7 % in the previous quarter. however, due account should be taken of the volatility of these growth rates. accordingly, economic growth during

##b issuing banking licences to empty shell companies. banks which plan to permanently book all exposures back - to - back with another entity in london might be in for a disappointment. this is not about a full ban of back - to - back booking. we rather aim at ensuring both an adequate local management of all material risks and the resolvability of the euro area entity. needless to say that i would certainly not accept banks ’ booking all exposures with the euro area entity while having their risk management and internal control systems outside the euro area. as we expect many banks to apply, i urge them to make up their minds and contact us early on. we will then decide on an appropriate path for them to meet our expectations. but one thing has to be clear : eventually, all banks will have to fulfil the high standards of european banking supervision. 3 / 6 bis central bankers'speeches we are talking to the banks, of course. and what we hear is that some of them are thinking about taking other paths into the eu market. they are considering complementing or even replacing licensed subsidiaries with other entities – investment firms or branches, for instance. such entities, however, would not come within the scope of european banking supervision. they would continue to be supervised at the national level. still, investment firms can be quite large and might conduct bank - like business. in countries such as the uk or the us, the largest investment firms are supervised by banking supervisors. to achieve greater consistency, regulation in the eu might be adapted – the intermediate holding company might be a part of a potential solution. the current review of the european banking rules might provide an opportunity to do so. for those banks we directly supervise we will in any case keep a close eye on the risks that result from different group structures and from relations between different entities of the same group. securing continuous market access will be the most pressing issue for uk banks – there ’ s no doubt about that. we know that some of them have already started to address this issue. and yes, time is of the essence. market access is just the first step. related to it are hundreds of other even more technical questions. how to treat financial and risk relations between existing and new entities in the euro area and related uk entities? how to deal with the internal models that uk banks might want to use in their newly established eu entities? how best to continue the fruitful cooperation with our colleagues from the prudential regulation authority