. why is this so? trichet : i think that observers and market participants are certainly listening to what we say, on both sides of the atlantic. two questions : what are your expectations as regards the financial market crisis and what repercussions will it have on credit activities for businesses? trichet : at the moment outstanding loans to the non - financial corporate sector are growing at a rate of 15 %, which is dynamic. on the one hand we see a progressive slowdown as regards loans to households and the housing sector. at the same time credit standards have tightened and we have to look at the situation very carefully. as regards the very significant ongoing market correction we will continue along our path : on the one hand adopting the appropriate monetary policy stance to deliver price stability and, once that decision is made, we have to ensure the smooth functioning of the money market in line with our policy rate. as you know, we have also been in close contact with other central banks, including the federal reserve. in the course of the financial crisis the impression of many people is that gains are privatised and losses are socialised. do you regard this as a problem? trichet : i think the issue of moral hazard is very important. it is absolutely clear that if those who have behaved improperly are not punished and do not take their losses then we cannot pave the way for sound decisions of financial institutions in the future. therefore we have always made the point that what we are doing is not, in any manner, aiming at bailing out any individual or institution and at diminishing the losses that would be made because of bad management. it is all about protecting those who behaved properly against the harm that has been done to the market as a whole by those who have taken bad decisions. that has been very well understood by observers and by market participants. but there are tendencies in the european union to think that bailouts would be considered if distortions of the economy are at stake. trichet : i was speaking for the ecb, the eurosystem and central banks in general. in exceptional cases one can imagine that the executive branches and the parliaments would consider that the systemic risk associated with the collapse of one particular institution because of a solvency issue would make it worth mobilising taxpayers ’ risk and taxpayers ’ money. this is something which cannot be excluded. as central banks we exclude taking such risks associated not with a liquidity issue but with a solvency issue of

we have to update and improve regulation. i also welcome the work which has been done by the private sector. it seems fair to me to give the financial institutions a chance to work out good practices and benchmark principles for their own voluntary behaviour. if they are not able to do that or if we judge their work insufficient then we have a case for regulation. in any case we should implement the 67 recommendations of the fsf as actively as possible. some recommendations should be implemented in 100 days, others by the end of the year. how do you judge the plans to create a world financial organisation proposed by the austrian chancellor? trichet : i would take the chancellor ’ s suggestions as a call to “ work as actively and as well as possible at the level of europe and the international community ”. i have to say we have the fsf, which has been created after the asian crisis. it is a group which brings together all the relevant financial institutions and groupings. we have the international monetary fund, we have the bank for international settlements, we have the g7 and we have the g20. so my sentiment is that there is a will to make the present framework function as well as possible, and this is good. the new ecb tower in frankfurt is being planned by the austrian architects coop himmelb ( l ) au. are there any delays in the work on this building and when will the tower be ready? trichet : we must be very alert, cautious and prudent, but at the moment there are no delays that i know of. the inauguration could take place at the end of 2011. one final question. do you ever listen to politicians like prime minister berlusconi or president sarkozy when they are criticising the ecb – or does a central banker have to ignore such comments? trichet : let me say that the maastricht treaty has given us full independence. this is very well known the world over. i do not know of any observer or market participant who would call into doubt the fact that we are fully independent and that the president and the members of the governing council are fiercely attached to this independence, as required by the treaty.