infrastructures for otc derivatives let me now turn to the need to strengthen the infrastructure for otc derivatives. otc derivative markets have been very dynamic with a veritable explosion in outstanding contract volumes primarily over the past decade. the basic problem, however, is that this very dynamic evolution of otc derivatives markets has outstripped development of the underlying clearing and settlement arrangements. indeed, as the post - trading of otc derivatives remained predominantly bilateral and non - standardised, the respective arrangements have become increasingly inadequate for coping with the growing volumes and complexity of otc derivatives trades. this was highlighted in particular during the financial market turmoil, when higher trading activity and market volatility further aggravated the existing tensions. [ the resulting processing backlogs and uncertainties about counterparty risk raised strong concerns among policymakers, as highlighted in the financial stability forum ’ s april 2008 report 1 on the lessons from the financial turmoil. ] the need to strengthen market infrastructures for credit default swaps ( cds ) stems from the importance of cds markets for overall financial stability, for three reasons. first, the systemic importance of cds markets comes from the high degree of interconnectivity between cds markets and credit and cash securities markets, the embedded financial leverage of cds, and the significant level of cds exposures in relation to the total assets and capital cushions of the banks involved. second, the associated financial risks, for example when compared to interest rate and foreign exchange derivatives, are more difficult to manage. this stems from the greater underlying complexity and the correlations between different cds exposures when market - wide strains occur. third, specific risks to financial stability stem from the high degree of market concentration where very sizable financial risks are held by a small group of major market players. therefore – as we have seen not only with the default of lehman brothers, but also the earlier near - defaults of bear stearns and aig – the default of one major cds counterparty can put these markets under very severe strain. a natural inference from our experiences during the current turmoil is, therefore, to improve the resilience of otc derivatives markets through a more widespread adoption of central counterparty clearing or exchange trading. central counterparties ( ccps ), by concentrating all outstanding derivatives positions of the participating buyers and sellers in one place, enable a significant reduction in counterparty risk : firstly, through the diversification and netting of risk exposures ; secondly, through the application of stringent risk - based margining

jean - claude trichet : state celebrations for the introduction of the euro in slovakia statement by mr jean - claude trichet, president of the european central bank, at the state celebrations for the introduction of the euro in slovakia, bratislava, 8 january 2009. * * * dear president, prime ministers, excellencies, dear governors, ladies and gentlemen, the introduction of a new currency is an historic moment for a country, and the introduction of the euro in a member state through the treaty - based convergence process is an historic moment for europe. robert schuman stated in his founding declaration that europe will be made through concrete achievements which create tangible solidarity among its people. european monetary union is a concrete achievement, and the euro is a tangible sign of solidarity among its people. the euro is also a tangible sign of increasing economic integration in europe, which is to the benefit of stability and prosperity for its citizens. today, with slovakia ’ s adoption of the euro, we therefore have every reason to celebrate. slovakia ’ s economic achievements on the way towards euro adoption slovakia has made remarkable progress in both nominal and real convergence. this has been reflected in a decline in inflation and a significant economic growth record. slovakia ’ s performance is based on the firm foundations of a bold economic reform programme implemented earlier this decade. cooperation between the ecb and narodna banka slovenska on the side of central banks, this historic moment has been prepared through a very close cooperation over the last couple of years between the european central bank and narodna banka slovenska under the leadership of governor sramko. this cooperation has laid the groundwork for the smooth and successful introduction of the euro in slovakia. the sustainability of convergence the introduction of the euro in slovakia will further enhance the benefits of the single market. the euro removes exchange rate uncertainty between slovakia and many of its most important trading partners, integrates the country into one of the world ’ s largest economies and helps to shield it from some of the effects of the international financial turbulence. it is also important to stress that the introduction of the euro must not give rise to complacency. in order to ensure that convergence is sustainable and that the slovak people can reap the full benefits of euro adoption, the slovak public authorities will need to pursue ambitious economic policies on all fronts. a rigorous and credible implementation of fiscal policy in line with the commitments of the stability and growth pact is particularly important. other policy measures would need to focus on slovakia