all this, we have also seen a sizeable appreciation of the euro since 2002, particularly against the dollar, taking it back to the level prevailing at its initial launch. from that short outline, it is clear that the economic and financial environment of the past seven years has provided a stiff test of the single monetary policy. given this background, what has been the outcome? over the past seven years, the evidence indicates that both inflation and inflation expectations have remained firmly under control. since the beginning of 1999, indicators of long - term inflation expectations in the euro area have remained below but close to 2 per cent. this suggests that the single monetary policy has been successful in anchoring long - term inflation expectations and that the public and the markets are convinced about the determination to maintain price stability over the medium - term. this has been a very significant achievement in a relatively short period of time and has been an important factor in permitting euro area interest rates to remain accommodative, even after last week's interest rate rise. i would like to comment briefly on last week's move and to emphasise its consistency with the monetary policy strategy we have in place. the decision to increase interest rates was taken against the background of the risks to price stability that have been identified. the decision will help to keep medium to long - term inflation anchored at levels consistent with price stability. even after this increase, interest rates remain low and continue to lend considerable support to growth. as to the future, i would emphasise that the governing council has not taken any'ex ante'decision to engage in a series of interest rate increases. our mandate is to maintain price stability and we will continue to monitor all developments closely. we will examine the data, make our assessment and act as appropriate to deliver price stability. the institutional framework the eurosystem institutional set - up involves centralised decision - making on monetary policy issues and decentralised implementation of those decisions. i can assure you that the central bank of ireland plays an important role in both areas. one of the features of the governing council is the democratic way in which it goes about its business. in a sense one should not be surprised by this : the statute of the escb provides for each member to have one vote and specifically restricts weighted voting to financial matters. i am impressed by the manner in which these principles are observed in practice. certainly, there is no sense of governors operating in a representative capacity when addressing euro area policies. equally

securities, asset management, insurance and pensions, clearing and settlement and many other cross - cutting issues. the impact of the fsap on financial markets will, however, take time to manifest itself fully, and the focus now is on consistent enforcement and implementation across the union. there are a several reasons why the bank, and the scab, want to see more integrated euro financial markets. these include better and more efficient allocation of risk and capital, the smooth operation of the monetary policy transmission mechanism and of payment systems, and greater overall financial stability. the financial system plays a fundamental role in the transmission of monetary policy, and integrated european financial markets facilitate the implementation of the euro area's monetary policy. this is particularly relevant in the wholesale money and bond markets in which the ebb and the bank, through the scab, are involved. financial market integration should also contribute to greater financial stability, since a larger and more diversified financial system is better able to absorb economic shocks. a robust framework for securities clearing and settlement - the plumbing of the financial system - is also needed. this infrastructure lies at the core of all financial markets and is indispensable for their proper functioning. there are a number of private and public - sector initiatives under way to promote the integration, efficiency, and security of the european securities infrastructure. one such important initiative is the development of the " standards for securities clearing and settlement in the european union ". these standards have been drawn up jointly by the scab and the committee of european securities regulators ( cesar ). in the context of financial integration, the target system that commenced operations on the first day of monetary union was a major initiative and it has proved to be very successful. it was created by interconnecting the then - 15 national real - time gross settlement ( rags ) systems and the ebb payment mechanism. target was created to provide a safe, efficient and reliable mechanism for the settlement of cross - border large value payments in euro and to serve the needs of euro system monetary policy. the system settles payments in real time with immediate finality in central bank money, thus eliminating settlement risk between participants. it is uniquely wide in its coverage, with almost 1, 100 direct participants and more than 48, 000 banks - including branches and subsidiaries accessible through the system. last year, an average of more than 267, 000 payments with a value of eur1. 7 trillion were transferred through target per business day. this makes target - alongside the fed wire system