In addition, the forthcoming revision of the Codified Banking Directive will provide a robust underpinning for greater cross-border cooperation among authorities, especially for large banking groups. The revised Directive will tighten the requirements for the information exchange and coordination between the consolidating supervisor and host supervisors. It will also assign the consolidating supervisor a coordinating role in the gathering and dissemination of information about the group as well as the planning and coordination of supervisory activities. Following these two major reforms, efforts should now focus on their effective implementation. As regards financial stability, there has been a significant increase in cross-border arrangements in response to the recommendations of the reports by the Economic and Financial Committee (EFC) on financial stability and crisis management. The important role of the Financial Services Committee (FSC), which was responsible for monitoring the implementation of the EFC recommendations, should be fully acknowledged at this point. With regard to crisis management, the 2003 Memorandum of Understanding between EU banking supervisors and central banks, and to which the new EU Member States adhered in June 2004, was a great accomplishment. For the first time, principles for managing financial crises that may have a cross-border impact were agreed at EU level. Nevertheless, the Memorandum may be not sufficiently detailed to cover large cross-border banking groups comprising several authorities, where crisis management is particularly complex. Given the potential far-reaching implications of financial disturbances involving such groups, the development of group-specific agreements could be an important avenue to explore.

By the way, with EUR 1.7 trillion settled every day, TARGET is already one of the two largest wholesale payment systems in the world, alongside Fedwire in the United States. With the functionalities that will be introduced in TARGET2, we also expect it to be one of the most, if not the most, sophisticated. TARGET2 will further improve financial integration in several respects. Not only will it increase cost effectiveness, but it will also allow for the provision of a harmonised service level ensuring a level playing field for banks across Europe. This will be supported by the implementation of a single price structure for domestic and cross-border payments. Moreover, TARGET2 will offer new functionalities enabling banks to better integrate their euro liquidity management. For example, participants will be able to group some of their accounts and pool the available intraday liquidity for the benefit of all of the members of the group of accounts. In addition, TARGET2 will benefit its users in terms of consolidated information. Whereas in the past an institution’s head office has not been able to see the information being held across its various branches, TARGET2 will enable it to monitor and process automatically all of its data from a single location. The level of integration that TARGET had already achieved in 1999 can be considered higher than that of the securities infrastructure today. Owing to the single currency, a significant process of consolidation has also taken place in the securities infrastructure in the euro area.