day value will make it more difficult to forecast flows such as tax receipts. it may be that the reserve bank will need to conduct operations in the open market late in the day to address any unexpected payment flows and ensure the right amount of settlement funds are in the banking system to allow the cash market to function appropriately. in the past, the bank has needed to resort to these “ second rounds ” of dealing only two or three times a year. going forward, we anticipate that second rounds of dealing will be more frequent. given this, we intend to formalise the arrangements for these operations, announcing at a set time each day whether further open market operations will be conducted and, if so, on what terms. where there is a need for an operation, it will be important that there is active participation from adis. as with our regular open market operations, it will not be the bank ’ s aim to simply supply overnight funds to those individual institutions that are short, or absorb overnight funds from those that are long cash. that is what the interbank cash market is for. as i mentioned a minute ago, the reserve bank ’ s operations are designed to put the appropriate amount of bis central bankers ’ speeches settlement funds in the system as a whole so that, in managing their individual es accounts, adis will transact with each other at the cash rate target. i ’ ll now turn to the basel iii liquidity reforms, which will be introduced in australia from january 2015. as is well known, those adis to which apra applies the basel iii liquidity standard will be required to hold enough high - quality liquid assets ( hqla ) to withstand a 30 - day period of stress. as is equally well known, with only commonwealth government securities ( cgs ) and semi - government securities ( semis ) meeting the basel criteria for hqla in the domestic securities market, there will not be enough securities to enable adis to meet this liquidity standard. at the present time, adis own around $ 130 billion of these securities. a rough estimate would be that this is as much as $ 300 billion short of where they would need to be to meet the basel standard, given their current balance sheet structures. mostly, the adis ’ holdings are in semis. these holdings of semis have increased almost tenfold since 2007, and now are around 40 per cent of the semi - government market. our assessment is that adis ’ aggregate holdings of hqla are

to be clear and realistic about what monetary policy can deliver and, even more importantly, what it cannot. monetary policy, even though well - designed and implemented, cannot solve all europe ’ s economic problems. appropriate structural reforms decisively implemented by national governments are vital for sustainable, non - inflationary growth of the euro area economy. to increase the growth potential in europe, structural reforms are needed for the euro area. this fact has long been recognised by eu policymakers, most notably by the european council when it adopted the lisbon strategy four years ago to foster economic growth and drive job creation. ambitious, well - designed and decisively implemented structural reforms in labour, product and capital markets will enhance the shock absorption capacity of the economy and the effectiveness of macroeconomic policies. in this respect, a convincing commitment to decisively implementing structural reforms and a credible communication of their economic benefits to the general public is crucial for raising consumer and investor confidence and, ultimately, growth and employment. the new and stimulating challenge of enlargement let me now turn to the new and stimulating challenge of enlargement, which, in my view, offers a great opportunity for the european economy as a whole. the enlargement of the european union by ten countries from central and eastern europe and the mediterranean on 1st may this year was without any doubt a major milestone in the history of european integration. these countries together comprise a population of 75 million people which is about one fifth of that in the enlarged eu. while the economic weight of the new member states is, at the current stage, less significant - their total gdp as a share of the existing members is about 5 % ( at market exchange rates, as compared with around 8 % of the eu gdp when spain and portugal joined the eu in 1986 ), this will change in the future as their per - capita income levels are catching up with those in the rest of the eu. what are the economic implications of eu enlargement for the european economy? the debate about the effects of enlargement is often dominated by concerns, such as the risk of mass migration from the new member states, involving increased pressure on labour markets and welfare systems of the other member states. in my view, the benefits that enlargement brings are often neglected in such discussions. i am convinced that eu enlargement is a win - win game for both the old and the new member states, which will contribute positively to economic growth and welfare in the european union as a whole. let me