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. at the present moment, the current configuration remains complex, with a significant number of national exchanges, clearing houses and central securities depositories. further consolidation of some of the european infrastructure is advisable. the ecb has a particular interest in an integrated securities infrastructure because it uses it in the context of the collateralisation of its intraday credit operations for payment system purposes and its monetary policy. in addition, a major disruption in a securities settlement system could undermine the stability of financial markets. there are numerous private and public - sector initiatives under way to promote the integration, efficiency, and security of the european securities infrastructure. the “ standards for securities clearing and settlement in the european union ” that have been drawn up jointly by the escb and the committee of european securities regulators ( cesr ) are an important initiative. in its communication on “ clearing and settlement in the european union ”, the european commission recently outlined the actions it intends to undertake to improve clearing and settlement arrangements, which are welcomed by the ecb and the eurosystem. in particular, we agree that the barriers as identified by the “ giovannini group ”, must be eliminated. in addition, we concur that some parts of the clearing and settlement industry deserve careful attention from a competition policy point of view. finally, in order to ensure the smooth operation of the markets and guarantee financial stability, we share the commission ’ s view that a sound regulatory framework is essential. in principle, the ecb and the eurosystem also support the adoption of a framework directive on clearing and settlement, for two main reasons. first, a directive would complement the market - led removal of the “ giovannini barriers ”, a necessary condition for competition to be able to fully play its role. second, the implementation of the escb / cesr standards, as well as any other harmonisation measures, may require changes to the national legal framework that cannot be made by the national supervisory authorities. we do not expect this framework directive to duplicate

to highlight the stability assessment of the eu banking sector, performed by the escb ’ s banking supervision committee, and the comprehensive analysis of potential vulnerabilities in the euro area financial system as a whole, which was carried out as part of the ecb ’ s financial stability review. in addition, the cebs is expected to improve its internal exchange of information on individual institutions and groups. markets i now turn to the second component of the financial system, the financial markets. the introduction of the euro and the measures adopted under the fsap have spurred the integration of the european financial markets. nevertheless, there continue to be varying degrees of integration. wholesale money and bond markets tend to be relatively well integrated, but only the unsecured euro money market has reached a fully satisfactory level of integration. the integration of the market of debt securities has been significantly increased, although not yet reaching the level of the united states. in the euro area, the amount of outstanding debt securities issued by non - financial corporations in their domestic currency represents around 5 % of gdp, compared to a figure of more than 20 % in the united states. integration is progressing in the government bond markets and, to a lesser extent, also in the corporate bond markets. the corporate bond markets have grown and deepened substantially in europe over the past years, although a large gap with the united states still exists as regards the outstanding volume. but the new issuances in 2003, according to the best estimates, were of the same order of magnitude on both sides of the atlantic. the business of underwriting corporate bonds in euro, on the other hand, is a wholesale banking area that has become largely pan - european and even international. the short - term securities markets in europe are slowly integrating. the market ’ s size for commercial paper in the eu represents about eur 1000 billion, which is about two thirds of the size the us market for commercial paper. as i mentioned earlier, one of the ecb ’ s approaches to fostering financial integration is to act as a catalyst for initiatives from the private sector. one such example is the short - term european paper ( step ) initiative, which was set up by the aci – the financial markets association. it aims to promote the convergence of the practices prevailing in the fragmented european short - term securities markets through market players ’ voluntary compliance with the standards set out in the step market convention. the governing council of the ecb has decided to support, in principle, the activities pertaining