Similarly, the Desk’s foreign reserve management counterparties facilitate operations that are investments of the Fed’s and also the Treasury’s foreign currency reserves. Two other considerations underlie the counterparty framework and support the effective execution of open market operations and primary issuance of Treasury securities. First, the Desk has long recognized the importance of transacting with established, regulated market participants that are capable of settling trades and financing long and short positions reliably  1  I would like to thank Stephen Douglass, Frank Keane, and Susan McLaughlin for their excellent assistance in the preparation of these remarks and colleagues in the Federal Reserve System for numerous insightful comments and suggestions. 2  Counterparties also facilitate the Desk’s provision of services to foreign central banks, governments and international official institutions. Additional detail on these services can be found on this website. BIS central bankers’ speeches  1  and on a consistent basis in a range of market conditions. Our counterparty framework must be of an appropriate size to provide adequate execution capacity and competitive pricing. Second, the execution of domestic open market operations and primary issuance of Treasuries is facilitated by a liquid, smoothly functioning secondary market for Treasury securities. The Federal Reserve’s abiding interest in promoting the integrity and efficiency of the secondary market has motivated our recent efforts to join other agencies in analyzing the events of October 15, 2014, and to understand the implications of the evolution of Treasury market structure and the increasing incidence of electronic and automated trading.

That would be a mistake if we want to take collective control of our destiny in this new world – a world marked by direct criticism and unilateral action on the part of the new President of the United States. What we need is not necessarily more Europe, but rather a “better” Europe: a Europe that is less caught up in the detail, more focused on a few key priorities, and more efficient. A Europe that talks less and acts more: “Little, well, until the end.” Of course, there are some non-economic areas: youth training – like Enrico Letta, I believe in the benefits of an Erasmus-pro programme for apprenticeships – climate change, defence and the protection of our borders, for example. On the economic level, we should be proud of our successes – our single currency, our single market and our shared social model. But to complete the success of our monetary union, it is vital that we make progress on our economic union. There are two concrete levers for achieving this . A “Financing Union for Investment and Innovation” The first immediate step is a “Financing Union for Investment and Innovation” (FUII). Why? In those economies that are close to the so-called technological frontier, as is the case with France and Italy, innovation is the key to economic growth, and not just for start-ups. The problem is that, today in Europe, there are companies that want to invest and innovate, but that cannot find the right financing, notably equity capital.