CREDIBILITY, consistency and continuity will be the dominant factors in measuring the progress of EU states towards achieving the fiscal criteria for European Monetary Union, according to Bundesbank council member Mr Franz Christoph Zeitler.

Considerable efforts were still needed in most EU countries to meet the fiscal policy criteria for membership of the EMU, he warned. Progress in fiscal consolidation - cutting budget deficits - had been slow, Mr Zeitler said at the European Finance Convention in Dublin yesterday.

There was no time pressure on EU leaders to reach agreement on an EMU stability pact at the Dublin summit next week, he said after the meeting.

Stating that he hoped progress could be made on the pact at the Dublin summit, he said he was not sure that the present draft pact reflected the political will of EU finance ministers as expressed at their informal meeting in Dublin on September 5th.

European Monetary Union would mean a significant increase in operating costs and a reduction in revenue at Irish banks, according to the chief executive of Ulster Bank Markets, Mr Martin Wilson.

Speaking on The Bankers Perspective, Mr Wilson forecast that bank operating costs would rise by three to 4 per cent. At Ulster Bank this would be equivalent to 4.5 to. 5 per cent of pretax profits, he pointed out. Information technology costs would rise by about 70 per cent, stationery, marketing and public relations costs would be about 20 per cent higher and staff training would cost more than 10 per cent extra, he forecast.

The arrival of the single currency would present major challenges for bank management which would have to cope with cost issues, some competitive disadvantages compared with bigger financial centres and the problems of redeploying staff, he said. About six to 8 per cent of jobs in banking would be under threat unless staff could be redeployed and retrained, he said.

Mr Wilson predicted the Irish banks would lose about 50 per cent of the income they generated from foreign exchange transactions, assuming sterling and dollar transactions remained.

But opportunities to generate income would arise out of European Monetary Union, he said. There would be opportunities for operations based in the International Financial Services Centre, to supply back office administration services and opportunities in funds management and fund administration.

Monetary union would result in reduced transaction costs on trade between participating economies, and reduced interest and inflation rates, Mr Jim O'Leary chief economist at Davy Stockbrokers told the convention. But EMU would diminish the capacity of members to respond to "asymmetric" economic shocks, he warned.

He described "asymmetric" economic shocks as shocks that had a differential impact across member countries and therefore needed a differential policy response.