Over the last few years they have invested increasingly in bonds of their home governments and their home regions. The links between bank risks and sovereign risks have become much stronger, not looser, in recent years. Nonetheless, the reasons for this development are more nuanced than simply the outright public ownership of banks.
Continued vigilance is therefore of the essence with regard to those risks. I shall now explain our assessment in more detail. Turning first to the economic analysis, recent data on economic activity, as well as survey information, suggest ongoing moderate growth in the fourth quarter of 2004 and a broadly unchanged situation around the new year.