european central bank : press conference – introductory statement introductory statement by mr jean - claude trichet, president of the european central bank, frankfurt am main, 8 march 2007. * * * 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 mr steinbruck, president of the ecofin council, and commissioner almunia. at today ’ s meeting, we decided to raise the key ecb interest rates by 25 basis points. this decision was taken in view of 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 fostering sustainable economic growth and job creation in the euro area. after today ’ s increase, given the favourable economic environment, our monetary policy continues to be on the accommodative side, with the key ecb interest rates moderate, money and credit growth vigorous, 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 fourth quarter of 2006 was 0. 9 %, which was above previous expectations. our current assessment is that the quarterly profile of real gdp growth is likely to be somewhat smoother in response to the impact of indirect tax changes in one large euro area country than had originally been anticipated. the strength of real gdp growth in the fourth quarter is thus indicative of ongoing robust growth in the euro area. both domestic demand and exports made significant contributions to real gdp growth, confirming the sustained and broad - based nature of the current expansion. the information on economic activity from various confidence surveys and indicator - based estimates supports the assessment that robust economic growth has continued into 2007. looking ahead, the medium - term outlook for economic activity remains favourable. the conditions are in place for the euro area economy to grow solidly. as regards

cleared markets face. on the other hand, some consequences of central clearing may increase systemic risk : • as a result of growing risk concentration in ccps and in a limited number of large global dealers, which act as general clearing members as a gateway for other financial institutions to ccps, • as a consequence of mutualisation, risks may spread among participants and markets more widely and the distribution of losses is more difficult to predict, • in order to avoid mandatory clearing, we might see migration of risk outside of the regulated universe through the artificial creation of bespoke ( and hence risky ) products that are not suitable for central clearing. moreover, the systemic effect of clearing depends on whether risk is redistributed to those who are more able to deal with it, which is difficult to determine. finally, the overall systemic effect depends on the incentives for risk - taking and central clearing that accompany risk redistribution. [ slide 5 ] to promote central clearing and avoid regulatory arbitrage, a number of reforms have been adopted including : ( i ) mandatory clearing, ( ii ) margin requirements for non - centrally cleared trades, and ( iii ) higher capital requirements for non - centrally cleared trades. this highlights the crucial complementarity between the regulation of banks and the regulation of financial market infrastructures ( fmis ), with the overall objective that regulation reduces overall risk, and does not shift it around the financial system. cooperation between the committee on payments and settlement systems and the international organisation of securities commissions ( cpss - iosco ) on the one hand, and the basel committee on banking supervision ( bcbs ) on the other hand, is key in this respect. a macroeconomic impact assessment led by the bis focused on the effects of these reforms and found net benefits of 0. 12 % of gdp per year. these are estimates of the long - run consequences of the reforms and are expected to apply once those reforms have been fully implemented and produced their full economic effects. however, central clearing also involves risk redistribution and potentially the creation of new risks. the overall impact is therefore less certain : there are significant benefits which need to be balanced against potential new risks and uncertain risk redistribution effects. ultimately, it seems to me that the success of central clearing as a tool for promoting financial stability critically depends on two factors : ( i ) the ability of ccps to handle the risks they are concentrating and thus the design of their corporate governance, risk management and recovery frameworks and ( ii ) the ability of the