Economic and monetary issues At the time of my last appearance before the European Parliament in February, I described how the available data at that time were in line with an assessment of a re-acceleration in economic growth in the euro area in the first months of 2006 and with a broadening of the expansion of economic activity.
As regards the cross sectional dimension of the systemic risk which deals with the interconnectedness issues, various measures have been undertaken such as, prudential limits on aggregate interbank liabilities; restricting the access of uncollateralized funding markets only to banks and PDs and stipulating caps on lending and borrowing; restricting the banks’ investments in the capital instruments of other banks; stipulation on banks’ exposure to NBFCs and MFs and close monitoring of systemically important NBFCs and financial conglomerates; restrictions on unbridled innovation in financial products; enhancing transparency and addressing risks in OTC transactions by operationalizing reporting platforms and CCP arrangements.