in countries with developed financial markets. these findings suggest that countries with more liquid capital markets and a developed banking system are growing faster on average. 15 increasing product market competition – at the eu and national levels – would enable more efficient production structures. the benefits of opening network industries to competition can be seen in the telecommunications sector. the hourly labour productivity in this particular sector saw a significant acceleration from 4. 5 % to 7. 3 % from the periods 1980 - 1995 to 1995 - see the ecb occasional paper series no 44 “ competition, productivity and prices in the euro area services sector ”, by the task force of the monetary policy committee of the escb, april 2006. european commission, “ the single market : review of achievements ”, november 2007. today, the services sector accounts for 70 % of gdp, 68 % of employment and 96 % of the new jobs created, but only 20 % of intra - eu trade. this discrepancy reflects not only the fact that services often have an intrinsically local character, but also the many barriers and obstacles still hindering the free movement of services within the european union. see p. hartmann, f. heider, e. papaioannou and m. lo duca ( 2007 ), “ the role of financial markets and innovation in productivity and growth in europe ”, ecb occasional paper series, september, as well as ecb ( 2007 ) “ financial integration in europe ”, frankfurt a. m : ecb. some authors have calculated that if the average size of capital markets in the european union was bigger in the united states for instance, it is around 450 % of gdp instead of 220 % as in the european union ( based on an overall indicator measuring total financing in the economy by aggregating bank credit to the private sector, stock market capitalisation and the outstanding amount of domestic debt securities issued by the private sector ) - then annual gdp per capita growth in the european union could be positively influenced ( see g. favara ( 2006 ), “ an empirical reassessment of the relationship between finance and growth ”, mimeo ). 2005, and telephone prices charged by the former monopolies for national and international calls for instance, fell by more than 40 % on average in europe between 2000 and 2006. this supported the purchasing power of consumers, who have now more of their income available to spend on goods and services. supporting an innovative environment to fully exploit productivity potential, the product market reforms i

##rb must be secured for the ecb and the national central banks : this would boost the board ’ s technical capabilities, fully exploiting the synergies between monetary policy and macro - prudential policy. stress testing of banks ’ balance sheets in the spring of last year, the stress tests at the major us banks revealed, under the responsibility of the prudential authorities that had conducted them, the scale of the risks of individual banks, above all those in connection with the “ toxic ” assets on their balance sheets. this transparency drive was amply repaid by the markets : these banks, several of which had been assisted initially by public money, succeeded in raising over $ 200 billion in private capital, an unthinkable figure prior to the publication of the test results. stock exchange assessments and fund - raising also benefited from the release of the results. now europe, albeit in less severe market conditions, has decided to proceed down the same road and will confront the us exercise. but the european tests examine more risk factors than those contemplated in the american case. in addition to adverse macroeconomic conditions, they also assume an increase in the market ’ s perception of sovereign risk. the stress test hypothesizes : gdp growth three percentage points lower than that currently estimated by the european commission for the two years 2010 – 11 ; and a larger rise in medium - and long - term interest rates than that recorded during the greek crisis in the early days of may of this year. compared with the us exercise, which involved 19 banks and three supervisory authorities, the european stress testing is much more complex, involving 91 banks in 20 countries. it is being carried out by national supervisory authorities in accordance with common guidelines and coordinated by the committee of european banking supervisors with the participation of the ecb. the effort made by the authorities and the banks themselves has been exceptional. we hope that communications will be marked by a high degree of transparency. the results of the tests will be published on 23 july. by that date european governments will need to be ready to adopt appropriate measures if the results point to capital weaknesses and market solutions are not available. the italian banks the tests on the italian banks participating will inevitably produce a range of different results, but i am confident they will show individual banks ’ capital to be adequate. in the first quarter of this year the ratio of new bad debts to total bank lending remained stable at 2 per cent, a high value by comparison with the last ten years. we expect the