africa. for any successful reform, you need to start with ambition and conviction, and then you need to follow that with great care and responsibility, to get the execution right. i hope with this lecture i have helped us find our ambition and conviction, so we can move on to excellence in delivery. thank you. as patrick honohan and athanasios orphanides noted in their review of south african monetary policy, “ inflation at 4. 5 % is arguably still too high to be really thought of as price stability. ” south africa – towards inclusive economic development ( sa - tied ), ‘ monetary policy in south africa, 2007 - 21 ’, sa - tied working paper no. 208, march 2022. https : / / sa - tied. wider. unu. edu / sites / default / files / satied - wp208. pdf

not smoothed out. hence financial markets and financial institutions contributed 62 % to the absorption of idiosyncratic state shocks. we therefore see from the us example a research study conducted by london economics a few years ago estimated the benefits of the integration of european bonds and equity markets to be around 1 % of additional gdp over a ten - year period. london economics, 2002, “ quantification of the macroeconomic impact of integration of eu financial markets ”, report to the european commission. see also “ eu productivity and competitiveness : an industry perspective. can europe resume the catching - up process? ” by mary o ’ mahony and bart van ark, european communities, 2003, for a comparison of the financial sector contribution to annual labour productivity growth in the us and the euro area. see p. asdrubali, b. sorensen and o. yosha, 1996, “ channels of interstate risk sharing : united states 19631990 ”, quarterly journal of economics vol. 111. that the financial channel can be much more important than the fiscal channel. this is an additional reason to speed up financial integration in europe. in a more recent study, it was found that the euro area situation has begun to converge towards the situation of the united states and that there is already modest but non - negligible insurance through inter - state capital flows. it was found that in the euro area ( excluding luxembourg ), capital markets would have smoothed out about 10 % of the country - specific shocks to gdp between 1993 and 2000. 6 a set of indicators published by the ecb also points to an increasing degree of integration of euro area financial and banking markets. 7 for instance, there is significant evidence that euro area corporations are taking advantage of the possibility to raise funds. as a result, the euro corporate bond market has grown significantly since 1999, and has the potential to grow even further, judged by a comparison with the us. in 1999, the outstanding volume of bonds issued by nonfinancial corporations was just 3. 9 % of gdp in the euro area and 24. 3 % in the us ; by 2006 it had increased to 12. 5 %, but relative to gdp the us corporate bond market is still one and a half times larger than that of the euro area. integration in retail banking, by contrast, has been slow so far, although it has picked up in the last two years. there are still differences in bank deposit and lending interest rates across euro area countries, whose cross