have helped the stressed banks. the lcr should not be considered a tool in isolation to measure and address liquidity and funding risks. to the contrary, the 1 / 3 bis - central bankers'speeches turbulence this spring shows that the basel framework – which has regulatory and supervisory pillars – needs to be seen and be implemented, in its entirety. for example, in the ecb, the check of regulatory measures such as the lcr is complemented by additional supervisory liquidity risk monitoring. a third and important lesson from the recent episode is that trust issues can develop and spread more quickly in the digital age. bank runs can happen faster than in the past. this makes it even more important to have bank managers'commitment to sound bank business models, because they are a precondition for trust. bank management matters in establishing trust in business models. we need a tough rulebook which allows supervisors to check and react to bank management - related issues. priorities for the banking package coming to the topic of today, what should we focus on for finalising the eu banking package? two key priorities emerge from the above learnings. first, only strong rules will lead to strong banks. i am particularly concerned about those areas where the legislation proposals for the capital requirements regulation ( crr3 ) would deviate from basel iii – especially on the risk - weights for loans to unrated corporates. these deviations lower the impact of the output floor on banks'required capital. in fact, on average, all proposed deviations together would more than halve the effect of the introduction of the output floor on banks'required regulatory capital, and even lower the required regulatory capital for some banks compared to the status quo. it is of particular concern that in some of the proposals these deviations are even suggested to be made permanent. watering down the safeguards provided by agreed global standards now would send a detrimental message not only on the future resilience of eu banks, but also regarding the eu's commitment to international agreements. a similarly concerning issue is the intention by some trilogue parties to reintroduce prudential filters on the accounting of unrealised losses on government bonds. these have been in place in the eu until the end of 2022 on account of a systemic exemption during the pandemic crisis. they need to be strictly limited to exceptional crises times and now is not the time to reintroduce them. as a second priority, i call on you to empower and

it is important that banks continue to expand the provision of credit to the private sector in an environment of increasing demand. to address this challenge, where necessary, it is essential for banks to retain earnings, to turn to the market to strengthen further their capital bases or to take full advantage of government support measures for recapitalisation. in particular, banks that currently have limited access to market financing urgently need to increase their capital and their efficiency. bis central bankers ’ speeches to sum up, the governing council decided to increase the key ecb interest rates by 25 basis points. the adjustment of the current very accommodative monetary policy stance is warranted in the light of upside risks to price stability that we have identified in our economic analysis. a cross - check with the signals from our monetary analysis indicates that while the underlying pace of monetary expansion is still moderate, monetary liquidity remains ample and may facilitate the accommodation of price pressures. all in all, it is essential that the recent price developments do not give rise to broad - based inflationary pressures over the medium term. our decision will contribute to keeping inflation expectations in the euro area firmly anchored in line with our aim of maintaining inflation rates below, but close to, 2 % over the medium term. such anchoring is a prerequisite for monetary policy to contribute to economic growth in the euro area. at the same time, interest rates across the entire maturity spectrum remain low. thus, the stance of monetary policy remains accommodative and thereby continues to lend considerable support to economic activity and job creation. recent economic data confirm that the underlying momentum of economic activity continues to be positive, with uncertainty remaining elevated. we will continue to monitor very closely all developments with respect to upside risks to price stability. turning to fiscal policies, it is essential that all governments achieve the consolidation targets for 2011 that they have announced. moreover, the announcement of fully specified consolidation measures for 2012 and beyond would help to convince the general public and market participants that the corrective policies will be sustained. strengthened confidence in the sustainability of public finances is key, as this will reduce interest rate risk premia and improve the conditions for sound and sustainable growth. at the same time, it is crucial that substantial and far - reaching structural reforms be urgently implemented in the euro area to strengthen its growth potential, competitiveness and flexibility. in the case of product markets, policies that enhance competition and innovation should, in particular, be further pursued to speed up restructuring and to facilitate advances