system purposes. in addition, a major disruption in a securities settlement system could undermine the stability of the financial markets. let me give you an example of the contribution of the ecb, and the escb as a whole, to financial integration in the field of securities infrastructure. this time, i will refer to our responsibility of giving advice to the shaping of the legislative and regulatory framework of the financial system. the escb and the committee of european securities regulators ( cesr ) have jointly drawn up the “ standards for securities clearing and settlement in the european union ”. should a framework directive on clearing and settlement be adopted, which we support in principle, this directive would stipulate high - level principles to be further developed by implementing measures. we agree with the european commission that the escb / cesr standards might form the basis of such implementing measures. in this respect, we also invite the commission to explicitly recognise the overall responsibilities and tasks of the ecb, together with the national central banks, and in particular their role in the oversight of the securities clearing and settlement infrastructure. let me now address financial integration from the stand point of financial institutions. 2. 2. 2 financial institutions and the regulatory and supervisory framework given its pivotal role in channelling funds into the eu economy, a well - integrated banking sector is a prerequisite for achieving a truly single financial market. i would like to describe the degree of integration in the euro area banking sector along three dimensions : first, cross - border consolidation or ownership ; second, magnitude of cross - border activities ; and, third, cross - border competition ( i. e. the price component ), where i would like to look at aspects of retail banking. as regards the integration in ownership of euro area banks, banking consolidation has mainly taken place at the domestic level, and it witnessed peaks in the late 1990s when around 80 % of all m & as in the eu banking sector involved domestic banks only. however, between 1999 and 2001 in particular, cross - border banking consolidation increased in both absolute and relative terms. as regards cross - border activity of banks in the euro area, cross - border holdings of securities and inter - bank loans have experienced substantial growth. for example, at the end of 2003, around 45 % of the securities issued by non - banks were held cross - border, twice as many as five years earlier. around 25 % of all interbank loans were granted cross - border, also up from around 20 % in 1998. in

european central bank : press conference – introductory statement introductory statement by mr jean - claude trichet, president of the european central bank, frankfurt am main, 7 december 2006. * * * ladies and gentlemen, the vice - president and i are very pleased to welcome you to today ’ s press conference. let me report on the outcome of our meeting, which was also attended by the president of the eurogroup, prime minister juncker, and commissioner almunia. at today ’ s meeting, we decided to increase the key ecb interest rates by 25 basis points. this decision reflects the upside risks to price stability over the medium term that we have identified through both our economic and monetary analyses. today ’ s decision will contribute to ensuring that medium to longer - term inflation expectations in the euro area remain solidly anchored at levels consistent with price stability. such anchoring is a prerequisite for monetary policy to make an ongoing contribution towards supporting sustainable economic growth and job creation in the euro area. after today ’ s increase, our monetary policy continues to be accommodative, with the key ecb interest rates remaining at low levels, money and credit growth strong, and liquidity in the euro area ample by all plausible measures. therefore, looking ahead, acting in a firm and timely manner to ensure price stability in the medium term is warranted. the governing council will monitor very closely all developments so that risks to price stability over the medium term do not materialise. turning first to the economic analysis, according to eurostat ’ s first estimate, the quarter - on - quarter growth rate of real gdp in the euro area for the third quarter of 2006 was 0. 5 %. the data thus confirm our assessment that economic activity continued to expand robustly, while moderating from the very strong rates seen in the first half of the year. domestic demand remained the main driver of economic growth in the third quarter, confirming the anticipated broadening of the recovery and pointing to the increasingly self - sustaining nature of economic expansion in the euro area. the information on economic activity from various confidence surveys and indicator - based estimates supports the assessment that robust economic growth has continued in the fourth quarter of this year. looking ahead, the conditions remain in place for the euro area economy to grow at solid rates around potential. while some volatility in the quarterly growth rates is likely to emerge around the turn of the year, associated with the impact of changes in indirect taxes in a large euro area country, the