of the euro area and in the rest of the world. within the euro area, the elimination of exchange rate risks and the lower transaction costs which followed, together with the far more transparent markets the euro brought with it, have created new opportunities for businesses and forced firms to attain higher levels of efficiency and competitiveness. a further success factor for the euro has been and still is its role as a catalyst in the process of financial integration, thereby enhancing the widening and deepening of the euro area financial markets. a large, liquid and integrated money market was rapidly created after 1 january 1999. this, in turn, triggered a significant growth of interest - bearing instruments denominated in euro. on the unsecured money market, the eonia ( euro overnight index average ) reference rate, an interbank overnight interest rate index compiled by the ecb, has established itself as one of the most important, perhaps even the most important, reference rate. the eonia swap market is now considered the largest overnight swap market in the world. in the bond market, too, the euro played a crucial role in fostering the deeper and more liquid euro area bond market that we see today. as early as in 1999, the total amount outstanding of euro - denominated debt securities made the euro bond market the second largest bond market in the world, and the international issuance of the euro - denominated bonds has even outpaced that of us dollar - denominated bonds for a few months at a time. at the international level, the euro has become the second most widely used currency as a result of the overall weight of the euro area economy in the world and the legacy of the national currencies which were replaced by the euro. looking at official international uses, the euro is second only to the us dollar among the world's official reserve currencies. the gap between the two currencies, however, is wide. according to the latest available data, the euro accounted for around 13 % of the world's official foreign currency holdings at the end of 1999, compared with a us dollar share of around 70 %. experience has shown, however, that there is a considerable time lag before the importance of a currency, as indicated by the economic weight of the country issuing that currency, is reflected in its use as an official reserve currency. as an anchor currency, the euro plays a role in the exchange rate regimes of more than 50 countries outside the euro area. the

solutions adopted by these countries range from very close, or even full, links to the euro, such as the unilateral entitlement to use the euro as legal tender – euroisation – to looser types of anchoring, such as peg arrangements and crawling fluctuation bands. i would like to conclude this brief overview of the international role of the euro by emphasising that developments in this field will be the outcome, first and foremost, of a market - driven process. at this point, let me move the focus of my presentation from the introduction of the euro and its role in financial markets to the institutional factors behind the success of the ecb and its monetary policy. the institutional set - up and the objectives of the ecb the treaty establishing the european community assigned to the ecb the maintenance of price stability in the euro area – i. e. the internal stability of the euro – as its primary objective. it is through the credible and lasting maintenance of price stability over the medium term that the ecb can best contribute to sustained long - run economic growth, employment creation and better standards of living. in our view, the uncertainties surrounding the monetary policy transmission mechanism, part of which arises from the continuous evolution of economic behaviour and institutional structures, make the central bank ill - suited to fine - tune economic developments. without prejudice to its primary objective, the ecb shall also support the general economic policies of the european community, such as the enhancement of output growth and employment. this does not, however, mean that the ecb bears responsibility for objectives other than price stability. by giving its monetary policy a medium - term orientation, the ecb does show concern for, and contribute to, smoothing output fluctuations. it is clear, however, that the instruments and the mandate to promote potential output and employment lie with structural policies, and thus primarily at the national level. the allocation of tasks and objectives to different policy - makers in the euro area is thus very clear. the budgetary provisions in the treaty, which limit the level of government deficits and debts, and the stability and growth pact, which introduced the goal of budgetary positions close to balance or in surplus as a medium - term objective for member states, have been key to achieving sounder public finances. for purposes of supporting and safeguarding the pursuit of price stability, the treaty has endowed the ecb with a high degree of institutional independence. being protected from potential political pressure is a further crucial factor for the success