 decided to adopt the euro, they're willing with the monetary sovereignty and the ECB has taken more responsibility for the monetary policy than you are. But when we say the ECB, in fact, there is a lot of confusion. Many people wonder why is the world now a financial sample price. More than often we see the question whether something down there or not. Many people think they could simply have disappeared. Others fear the ECB settled in Frankfurt. We didn't know the reality, the needs of the different territories, which are these companies to which it's managed. But the reality is quite different. Under the EU treaty, it is really the ESCB that is entrusted with carrying out some banking functions for the EU, the ESCB for European systems and programs. The ESCB is more increasingly of its own. The real actors that are the ECB and the NCBs of the euro countries, they jointly exercise the both functions of the ESCB and they do it under the main euro system. So how we will discuss with the euro system how it works, what is the original setup, the link with national tasks and the last issue is banking supervision. Why did we decide in 1998 to adopt the euro system, which was not at the time of the 15th, I was in China in the 13th, but there are basically two reasons. One is that we wanted to underline the organic link between the ECB and the NCBs, so that we have jointly as a system, federal system, by the way, I would come back to that in a moment, in which basically the decision making is centralized and the tasks are performed jointly mostly by the NCBs in a decentralized way. The second reason is that in the wording of the treaty, the ESCB would put the ECB and all 28 NCBs of all countries, including those of non-perspecting countries, and of course the latter are not involved in carrying out the banking functions, and therefore we thought the distinct wording was appropriate. But more fundamentally, why, what were the reasons why the system was established to carry out some of the banking functions for the euro, and not a single central bank? There were three arguments put forward to the petition meeting. One is that the establishment of a simple institution that was simply contemplating some kind of business in one single place would not be accepted as a political front. We should always remember that the law committee that was preparing on the EMU was made out mostly of some kind of governance. This was, by the way, the concept of Jack Bergeron himself. He wanted that to make sure that it would work. The second reason is that we wanted the euro system to be built on the experience of national central banks to preserve their institutional setup, infrastructure, their operational capabilities, their expertise, and that was all the more important, as we saw it, that NCBs continued to perform non-euro-distributed tasks. And finally, the ORN is a large geographic area, and therefore this simple extricate work allows great institutions to have a better access point, it's closer to them, to have their relationships with the euro systems using each domestic area system, using each national language, and that's a big, big asset. Beyond those analytical reasons, as we could say, I personally believe that this type of organization is in fact truly favorable. I think we often make a mistake in Europe, perhaps not in Ireland, but certainly in France. In federal means central banks. It's not at all the way it works. At least we look at the federal reserve system, which is so natural compared to Ireland. We find something very similar. The Board of Governors in Washington is performing functions that are very close to the DC, and the 12 federal reserve banks conduct activities and operations in each of the districts, the 12 districts, that's close to what the NCBs do. There is a major difference that lies in the fact that due to the concentration of financial markets and major banks in New York, the Federal Reserve Bank of New York takes a prominent role over its history of release, of release, as far as market relations are concerned. The philosophy behind the system centralizes this generally, decentralizing the implementation is largely different, and it's the same for all the functions that market. One important feature of this framework is that all members of your system are truly and only part of the system as long as they perform your system, your system really functions. Of course each NCB has its own legal personality within the national law, but they are all integral parts of your system. That's in the treaty, it's in the statutes, and next to the treaty is the Federal Reserve Bank of New York. When they carry out tasks that have been delegated by the governing council of the government of the ECB, in line with the principle of decentralization, following guidelines established by the council, following instructions, and the shoulders of the ECB, the NCBs of course, and of the ECB with capital and money reserve assets, the possibility of international financial resources, so the insights you missed. And one could add that the national legislation has been both in line in each case with European law, protecting the Netherlands, making sure that the NCBs have all the qualities to be fulfilled in the course of your system. But how does this system work in practice? And what are the respective tasks of the ECB and the NCBs? Before answering the questions, let me recall quickly what are the basic tasks of your system as described in the treaty and the statutes that are following. One, define and implement the monetary policy of the URIA. Second, to conduct foreign exchange operations, to hold and manage the official foreign reserves of the URIA and the states. Then, to promote the smooth operation of current systems, then to issue Euro net notes as the only such notes to have the status of the URIA. And finally, the treaty says to collect the statistical information necessary for the tasks of the URIA system. So, it's more of a simple monetary policy that's about the things around it. And how do they do that? Well, for the performance of this task, the statutes of the ECB, the signs to the ECB and the NCBs, a wide range of functional and operational competencies, open markets, operations, critical operations, minimum research, regulation of premium payment systems, et cetera, a number of things, a number of tools that all members of the URIA system use. Now, what is the modus operandi for the performance of this task? Basically, it was one key principle, centralized decision-making and operational decentralization. What is in the statute that's not to pollute is that the decision-making bodies govern the Euro system. These bodies take all the necessary decisions to enable the CDO serial numbers to carry out their tasks. So, this is centralized decision. It's not only limited to the formulation of policies of the change in interest rates and key interest rates, but it extends to the how is done, the implementation of policies for the ECB and the NCBs. Well, the statute doesn't say to what extent policies are to be implemented by the ECB or the NCBs. So, we have to decide in practice, and what has been decided is that for both of the Euro system activities, the division of labor will be guided by the principle of decentralization. What is in the statute is 12, 12-1. The ECB start-up will go to the NCBs to the extent impossible and appropriate to carry out those operations, etc. By the way, this principle of decentralization should not be confused as it is sometimes with the principle of subsidiarity. What subsidiarity means is that the need for decentralization must be proven conclusively before it is decided to take action of the EU level. Here we are dealing with activities where, at the political level, the decision has been made, the smart entry policy has been passed. We are in an area in which action has to be taken exclusively at the EU area level, period. So, there is no question whether the action is to be performed at the level of the system or left in the hands of national authorities. That's not the issue. It is to assess which part of the federal system is going to operationally do the work, perform the task, as the statute would say, to evaluate the action to which decentralization is possible. So, now, what is the operational centre? Well, in line with this principle of decentralization, in practice, the NCBs perform almost all operational tasks of the EU system, at least the both of them. In particular, they conduct the monetary policy operations that the banks have done with the NCBs. The NCBs refinance the banks. The NCBs buy normally the securities where they are in their ventures, like the national treasury. Even if the NCBs have that little bit, but the both of them are the NCBs. Even for a number of things, they are agents of the NCB, for instance, for external operations, for the NCB that is deemed intervening. But in practice, when there are foreign exchange interactions in the market, it's mostly the NCBs that intervene. They manage the buying exchange reserves transferred to the NCBs. Each of the NCBs has a bar corresponding to more or less to what it has transferred. There are some specializations. They provide, the NCBs provide permanent settlement of security settlement facilities. They ensure they deal with banknotes, procurement, issue, post-eventing of your banknotes. They collect statistics. They contribute to economic analysis. Of course, they bring in the models and studies conducted by the NCB. All the information and the analysis they can do at one time. A lot of research is coming in which they make sure that they don't see it. And we have set up, of course, organized with networks to do all this. So it's interesting to note that the common language is miles away from the reality as described. When people say, for instance, the ECB is injecting liquidity, or that the ECB is buying securities, they refer, in fact, to actions performed by the NCBs. Those actions appear on the balance sheet of those NCBs. The financial outcome, the profit of your performance loss, is mostly also burdened by NCBs. We have decided at the beginning that we would invest and over 8% of the ECB would have to allow it to work. And when I'm at least, and by the way, the ECB is shared, where it's in the profit and loss accounts of whom I show something nice, and when the analysts talk about the balance sheet of ECB, in fact, what they refer to is the consolidated euro system balance sheet, not the balance sheet. This high degree of decentralization is also mirrored in the distribution of staff. If you take out the banking function, it doesn't exist everywhere, it exists now in most places. Speaking of euro system functions, the ECB staff accounts today all in all to around 1,700 staff members. We have more or less, without supervision, 40,000 in the system today, slowly. If we take into account the supervisory function and the supervisory function at both levels, the respective numbers together would be close to 3,000 and 48,000. In the first case, I come to a percentage of 4.5%. Second look, I come to around 6%. Knowing that in national sample banks, at least some, or most national sample banks, there are at different degrees national tax, which are not your system related. I'll come back to that in a minute. So I would say probably we are around 5%. Probably in terms of your system, not someone with a rule of 5%. That's the order of magnitude. When you look at the federal reserve, the proportion between the staff and the rule of government, the addition of staff in the 12 federal reserve banks, you come to 5%. So we are really in something that is the same order of magnitude. And that's interesting. Because I think it's still very logical in what items to deal with the federal system. Of course, the fact that the government comes to be the main decision-making body isn't entitled to take the most important and strategically insignificant decisions for the ecosystem. There is one element pushing the government and the central government. Of course, the government comes to itself as a centralized body, with its composition, with all its new governments, and the six members of the executive people, all the governments, that entity, keeping the balance that was set in the statute. And there is a clear difference in my view with the Fed. In the case of the Fed, the same composition, as the governing council exists for the FOMC, the FOMC is really dealing with monetary policy. But the organization of the system is in the hands of the Board of Governors, which is the equivalent of our executive board. So in their case, well, they have respected the decentralization because they are thinking federal. In the case of the ecosystem, there's probably the fact that the governing council has both responsibility that is helping to keep the opportunity to wait against the tendency to centralize that may have a rise in other ones. The governing council has established five committees to assist with the decision-making bodies that provide expertise in the field of competence, the facilitation of decision-making as well as preparing technically possible decisions and the facilitation of the implementation process. And that has been very successful. I think it is contributing to the smooth functioning of the system because it's not only the Central Bank Governors who are involved in the cooperative action, but everybody in this field of competence. And that covers many things such as monetary policy, market operation, experiment systems, statistics, like those. But also the support of the alliance like accounting, units and rule of decay of issues and information technology. And that is a strong support to the reform system. One word on an interesting concept and my view which is the concept of concentration. What I mean is, I mean, over time the tendency of the system to streamline its organization to improve efficiency and effectiveness tends to lead to progressive concentration of activities in the ecosystem that has been observed everywhere even in the case of the ecosystem. But concentration does not mean necessary centralization. The concentration can be obtained by delegating part of the world to one or a few national central banks and making the system work in a way that it is operated by all members of the world system to perform certain tasks. The best example, the most famous by the way, is target do. When we started the URIR, the problem we had was to unify the main market. So how did we do it? We needed to link the ATG system and the ATG system to not get gross progress going. So we linked that. But we all have different systems, different technologies. And we know that the CAMP system is very discretized and it's not very well-reformed and costly. So when we have to be the second generation with the one not going to create again 11 or 12 or 15 or 19 different systems with different technologies and create new links that could be created very costly, very inefficient and very dangerous. But does it mean that we have to create a system to ask the ECB to create and run the system and concentrate all the links of the times there? No. What we did was the government comes in selected and the group of NCB is ready to make a joint venture to offer the system to create the system and to concentrate those links in several places. And then to have, so it could be only one system but there would be channels of this network in all NCBs so the connection with the commercial ones would remain exactly the same. So seeing from the customer of the banks it's always, it is the NCB, like in Target 1 in practice the system is operated in different computers in Frankfurt and that's it and the ECB is doing the surveillance of the workers to the core system. So that is the idea that we have developed at that time. The same idea has been taken over 42 years. There are a number of less known examples that are either a system or under preparation. And that's where the national task and I don't want to be too long with this little point to try to be short. Apart from your system task the national central banks can be designed to have national taxis set by the treaty and the only condition is that they do not infringe upon the existing, they do not interfere with the objectives and tasks and those national taxis vary in one country to another. It's mostly unused to be in financial services to the government and that includes almost everywhere as a typical function that a fiscal agent of development. Now there are two cases probably the famous in Ireland but the frontier between your system and non-your system is very obvious and one that you can ask was the famous ELE the emergency equity assistance. Although that consists of providing liquidity they are relative to this function of lending of passports with the banking system of each individual country. The objective therefore is not the management of liquidity in the system as a whole which is a tool of financial policy but it is the injection of liquidity selectively to one or several banks facing the liquidity shortage. When we discuss that in the beginning this is a national task but of course there is a possibility of interference with financial policy because that's a purpose to create liquidity and it must be under surveillance so we set the rules of surveillance framework which is to the government council assessing the regularity by assessing the the projective operations regularly and eventually objecting or not to their realisation and that there was also the government council to check into the county amount of liquidity that rules that would so it must not be too big so that it does not prevent the good management of liquidity. Of course with the banking union the question came back whether it should or not be considered as a euro system task. So far the county council has said no it will remain a national task also because we don't want to create a link between the governments and the government and us not to create between financial policy and supervision so since we have to keep a sort of Chinese war inside the CV it's not to recreate their but of course intellectually this was the sort of banks and the direct supervision maybe that is something that should be the beginning of the portfolios of securities by the NCB for the unfound portfolio the asset of the agreement from the financial side. The origin is very simple at the beginning of the EMU some NCBs had small portfolios of securities or small or not small of securities some NCBs even had a few loans to governments sometimes big loans to governments that were coming from the past they are not consensual to the conversions period but sometimes they have long loans so we have to decide what to do with all that and since we we have the possibility with what the best is to probably give each NCB the capacity to buy all and manage a small portfolio and of course we will decide every year the government can't assume the seeds who will set who so that you cannot support the government with that you can only invest small amounts in certain periods of time you are invited to member data reciprocation in your portfolio not have a single signature in your portfolio so and the ECB also met those compliance with the non-monetary fundings that are article 112 of which is so that's where we are and of course they have been de facto some links that say between the two concepts but you know that very well last word on banking supervision but I will be very short because I'm too long in my presentation let's say at the beginning of EMU a number of NCBs were involved in banking supervision it was typically the national task most of them with partly the exception of the Windows Bank the banking supervision responsibility is in the bad feeling but the Windows Bank as a bulk of staff working in banking supervision it's a complex situation in Germany and the China was there were a Belgium phenomenon there is no banking supervision responsibility it was sort of effecive type was a minority after the crisis Belgium has moved from one camp to the other and now it's the NCB and the new the new NCBs most of them have been sufficiently taken so it's really really the model now with the creation of the banking union one could have thought it could have been simple to establish more or less the same kind of sovereign for reasons which were essentially that they decided not to revise the treaty and although the treaty itself was referring to the EU system and assigning the task to contribute to the smooth conduct of policies relating to banking supervision what has been used is an article of the statutes enabling the council ministers to confer to be specific missions in the domain of the national supervision in that case a specific mission and there was a tendency of the NCB during the negotiation to also ask a lot of simplification so we have a system that is slightly different with legally a lot of responsibilities even to the ECB it's only so-called banks on the direct supervision the ECB announced the system and that not 100% of the countries at the NCB as the supervisor was a problem in practice most of the work was still at the national level but but it's working less as a system in that case so I conclude here I believe the system is coherent thanks to the unicity of rules and centralized decision making and is highly centralized and that means that it is in my view more efficient but it was by the way the cost of the staff member at the ECB was so much 50% the cost of the staff member cost of the staff member at the ECB level so if we were to transfer 20,000 or 30,000 it would be a huge cost for in my view much less efficient also the cost of dealing with several legal systems several legal systems is much lower in the level the decentralized level at the ECB if it were done something and finally I believe that it's an important feature for the political acceptance of having delegated what is a draw an important part of suffering of the company to be on your period thank you very much