##bs ) of all eu member states. the eurosystem is composed of the ecb and the 11 ncbs of those member states which have adopted the euro. the six members of the ecb ’ s executive board and the governors of these 11 ncbs together form the governing council. this is the eurosystem ’ s highest decision - making body, which, among other things, has adopted the eurosystem ’ s regulatory framework. in my speech today, i will elaborate upon how the ecb, but also the community legislator, national legislators and market participants have struggled with the same question which hugo de groot already addressed in his days in another context : in view of the introduction of the euro, where is, on the one hand, unification of law desirable and where may, on the other hand, national differences continue to exist? or, to remain closer to the title of my speech : where, and to what extent, has the euro acted as a catalyst for legal convergence, and where is further convergence appropriate? as a preliminary remark, the introduction of the euro and the globalisation of the world ’ s financial markets are clear incentives for a development towards “ one market, one currency, one law ”. there are, however, at least two important impediments for such law to emerge in the near future. first, there are the community law principles of subsidiarity and proportionality. subsidiarity requires that the community legislator only adopts legislation if this is necessary to achieve the community ’ s objectives. proportionality requires that the type of legal act to be adopted be proportionate, ie not too heavy, in relation to the objectives to be achieved. second, the eu consists of as many different legal systems as there are member states, although there are, of course, similar types of legal systems of common orientation ( roman law, anglo - saxon law or the scandinavian systems ). recognition of the peculiarities of such legal systems in accordance with the principles of subsidiarity and proportionality leads automatically to legal diversity. in addition, for the eurosystem it is also important to mention that system - related tasks are executed in a decentralised fashion through the ncbs in their respective jurisdictions. for example, with regard to the eurosystem ’ s single monetary policy, the ecb ’ s decision - making bodies decide on such policy, but the ncbs execute monetary policy operations in their respective jurisdictions. all in all, a system

in investors ’ approach. empirical evidence suggests indeed that sector - related factors are playing an increasing role in price dynamics. as integration enlarges the range of potential investors, it also fosters the development of private equity and the financing of young and innovative firms, a trend that is obviously welcomed. 1. 4 behind the scene, supporting the evolutions that i just touched upon, market infrastructures have undergone radical changes. as an example, as regards trading infrastructures, the creation and expansion of euronext is a striking illustration of the on - going consolidation process : the euronext group now links the french, belgian, dutch and portuguese stock markets, and has concluded co - operation agreements with several other european markets. the group also significantly increased its presence on interest rates derivatives markets. this ongoing movement of consolidation affects securities clearing, settlement and depository infrastructures, as providers aim to propose an integrated transaction service covering the entire securities processing cycle. in the field of post - market infrastructures, clearnet is pursuing its pan - european expansion by completing its operational integration throughout the euronext area. the clearing house also reached an agreement with its italian counterpart, enabling it to offer central counterparty services for transactions executed on the italian government securities market. a similar consolidation process is taking place in the central securities depositaries ( csd ) area, paving the way for a more efficient functioning of delivery versus payment ( dvp ) procedures, and easier and safer settlement of cross - border securities transactions. this latter aspect is of particular interest for the eurosystem, as a smooth functioning of securities settlement infrastructures is key for an efficient implementation of monetary policy. structural changes, such as the setting up of euroclear ’ s single settlement engine, are of great interest in that regard : the so called single settlement engine ( sse ) by 2005 will enable participants to settle securities transactions on a delivery - versus - payment basis between the group ’ s different depositories, more effectively than today and at a lower cost, without changing their interface or procedure. moreover, the central banks of the five countries concerned are discussing mechanisms that would allow euroclear participants to settle all their transactions in central bank money and on a real - time gross settlement basis with the central bank of their choice. 1. 5 all these developments highlight the necessity to harmonise operational practices, to define common standards and to adopt new procedures for co - operation between supervisory authorities. to function properly, markets require a well designed legal