eu legal status of the level 3 committees as well as to underscore the responsibility of national supervisors to contribute to eu cross - border convergence and cooperation by introducing a respective reference in their national mission statements. we also believe that a framework could be envisaged to allow eu institutions to provide enhanced political impetus to the work of the cebs, and the other level 3 committees, by giving strategic guidance and comments on their work programme. furthermore, an enhanced recourse of the cebs to majority voting could facilitate decisionmaking in those areas where no sufficient progress can be attained on the basis of a consensual approach. in order to integrate majority voting effectively within cebs ’ s voluntary mode of cooperation, the respective decisions should be observed by supervisors on a comply - or - explain basis and implementation should be carefully monitored via cebs ’ peer review mechanism. second, further efforts are warranted to improve the level of regulatory convergence. progress in this field is a key issue especially in the banking sector, where most eu rules – with the exception of the capital requirements directive ( crd ) – had been adopted before the lamfalussy approach became available. even in the case of the crd, the lamfalussy approach was implemented only to some extent. furthermore, the crd entails a large number of national options and discretions which hamper consistent implementation. given that the lack of regulatory convergence represents a serious obstacle to enhancing supervisory convergence, progress towards more consistent eu banking rules is absolutely critical. in the short - term, a main priority should be to achieve a significant reduction of the national options and discretions enshrined in the crd. enhanced action by the commission to ensure consistent transposition of the crd into member states ’ national laws is also warranted. furthermore, a requirement for member states to disclose any regulatory additions adopted could help address unnecessary further “ goldplating ” of eu rules. in addition, we welcome the suggestion of the cebs to provide own - initiative advice on areas in which regulatory convergence should be further enhanced with a view to broadening the scope for supervisory convergence. as to future new regulatory initiatives, it would be helpful if eu bodies would specify more clearly the level of harmonisation to be achieved in level 1 and 2 measures and follow - up closely the respective progress. in the medium - term, a gradual restructuring of eu banking legislation more in line with the lamfalussy framework should be pursued. third, the arrangements for

##erpretation of changes in the economy ’ s rate of productivity growth. in their view, after years of strong growth in the 1960s, policy - makers considered the slowdown to be a temporary phenomenon, while it later became evident that the deceleration in productivity was more persistent. according to this analysis, given the difficulties in recognising the nature of the slowdown in real time, monetary policy did not prevent a build up of inflation, which became entrenched in expectations and eventually led to stagflation, with relatively low growth and double - digit inflation. a painful disinflationary process was necessary in order to restore macroeconomic stability. this confirms that the best contribution that monetary policy can make in order to foster sustainable economic growth and job creation is to maintain price stability. this is generally true, not just in response to productivity developments. a monetary policy that is credible in pursuing price stability and ensuring that inflation expectations remain well anchored will help to create a stable macroeconomic environment. this, in turn, will ensure the economy functions smoothly, facilitate firms ’ long - term planning and stimulate investment. for these reasons, maintaining price stability is an explicit and overriding monetary policy objective in the euro area, as enshrined in the treaty establishing the european community. at the same time, price stability and well - anchored inflation expectations ensure that, if and when inflationary shocks do materialise, they are less costly to correct in terms of macroeconomic disruption and do not, therefore, undermine sustainable long - term growth and job creation. so far, i have emphasised the importance of maintaining price stability and referred to the inflationary experience of the 1970s, but i would not wish to suggest that the appropriate response to negative productivity developments is always the tightening of monetary policy, or that, conversely, the response to increases in productivity should always be the loosening of monetary policy. on the contrary, in fact, the real rate should move in the opposite direction in the long run. even in the short run, part of the difficulty in gauging the correct monetary policy response lies in determining whether a demand or supply effect is dominant. 11 in addition, it is also important to bear in mind that changes in the rate of growth of productivity do not occur in a vacuum, but instead typically take place at the same time as other unforeseeable events. in the euro area, the first few years of the new millennium have not been notable only for a