published by the ecb, banks ’ debt exposures were assessed as being manageable with respect to their capital buffers. however, the study identified so - called warehousing risk as a significant risk to which banks are becoming exposed through lbo - related activities. this risk arises from the material amounts of lbo debt that underwriting banks take on, with the aim of distributing it into the market shortly after the transactions are completed. the efficacy of these risk distribution processes strongly rely on the effectiveness of syndication processes and the degree of liquidity in credit risk transfer ( crt ) markets. i consider that the warehousing risks faced by banks start to increase. payment systems my final remarks concern the integration of payment systems in europe. i noted with satisfaction the positive assessment you made in the draft resolution about the single euro payments area and the target 2 project. the eurosystem will continue to play its role in this regard. as for the target2 - securities ( t2s ) project, the draft resolution shares the eurosystem ’ s assessment that this project might have the potential to foster the integration, the efficiency and the safety of the clearing and settlement infrastructure in europe. at the same time, the draft resolution notes that an appropriate governance structure is of the essence. as for the latter point, we have always wished to have a strong involvement of the markets in the t2s project. we have put in place a governance model for the development phase which seeks to involve all stakeholders through the creation of an advisory group on t2s where markets players are well represented. the “ advisory group ” – which reports directly to the ecb executive board and governing council – is composed for about two thirds by market participants and only one third by central bankers. hence, strong interaction between the ecb and the markets takes place on a continuous basis. on 26 april 2007, the ecb governing council launched an official public consultation on the principles and proposals underlying the t2s project. the 2 - month public consultation launched by the ecb is now finalised, and the market feedback is very useful. we received quite a high number of comments. a first preliminary assessment of these comments shows that their feedback is generally rather positive. out of 67 proposals, we have obtained a total of 3200 remarks from 56 institutions. 67 % of these 3200 remarks indicated full agreement to the proposals, while only 6 % indicated full disagreement. all the feedback received has been published ( unless the respondent

jean - claude trichet : presentation of the ecb ’ s annual report 2006 to the european parliament introductory statement by mr jean - claude trichet, president of the european central bank, to the european parliament, strasbourg, 11 july 2007. * * * monsieur le president, mesdames et messieurs les deputes, j ’ ai l ’ honneur de vous presenter aujourd ’ hui le rapport annuel de la bce pour l ’ annee 2006. le rapport annuel constitue un des outils principaux de la bce pour rendre compte aux citoyens de l ’ europe et a ses representants elus – le parlement europeen – de sa politique monetaire et de ses activites dans les autres domaines de sa competence. ich werde ihnen zunachst einen kurzen uberblick uber die wirtschaftlichen und geldpolitischen entwicklungen im jahr 2006 geben und die geldpolitischen maßnahmen der ezb erlautern. danach mochte ich einige anmerkungen zur finanzmarktstabilitat sowie zum thema zahlungsverkehrsysteme machen. economic and monetary issues in 2006 the ecb ’ s monetary policy continued to anchor medium and long - term inflation expectations at levels consistent with price stability. this reflected the credibility of the ecb in conducting its monetary policy, in full compliance with its primary objective of maintaining price stability over the medium term. the solid anchoring of longer - term inflation expectations is a prerequisite for monetary policy to make an ongoing contribution towards supporting sustainable economic growth and job creation in the euro area, in line with article 105 ( 1 ) of the ec treaty. in 2006 the euro area economy expanded at the highest growth rate since 2000. notwithstanding the impact of high and volatile oil prices, real gdp rose by 2. 9 % in 2006, compared with 1. 5 % in 2005. the economic recovery gradually broadened in the course of 2006, and the nature of the economic expansion became increasingly self sustaining, with domestic demand acting as the main driver. despite some moderation, the ongoing strong momentum in economic growth continued in the first quarter of 2007. the euro area continued to benefit from the robust ongoing expansion of the world economy, while