- area exports did surge after the adoption of the euro in january 1999. however, cyclical conditions and the early weakness of the new currency no doubt played a critical role in that increase, an inference confirmed by the substantial slowing in european export growth since the beginning of 2001. also striking is the fact that the share of total euro - area exports destined for other members of the euro - zone did not increase with the introduction of the new currency, as would be likely if the common currency promoted trade. indeed, at about 50 percent of total exports, the intra - euro - area export share today remains noticeably below the recent peak of about 57 percent reached in the early 1990s. the most decisive evidence on the trade question can be found by looking at microdata. in an important study, john rogers ( 2003 ) of the board staff analyzed annual data on the prices of 139 items, collected by the economist intelligence unit for twenty - five european and thirteen u. s. cities. for his main results, rogers divided the items into traded and non - traded categories, though he considered many other ways of slicing the data as well. he then analyzed the cross - city dispersion of prices in each year. of course, the reduction of barriers to trade, the harmonization of tax policies, and the increased efficiency of cross - national markets should lead to reduced dispersion in the prices of goods, especially actively traded goods, as competition and arbitrage reduce local monopoly power and differences in prices. rogers found a substantial decline in the dispersion of traded - goods prices across european cities over 1990 - 2001. indeed, by the end of the period, the variability of traded goods prices across cities within emu countries had declined by more than half, and it was not substantially different from the variability found among cities in the united states. this convergence of prices suggests a powerful, ongoing process of increased economic integration and elimination of barriers to trade among the members of the european monetary union. crucially, however, rogers found that the bulk of this convergence occurred between 1990 and 1994, the period of the “ single market ” initiative. only a small part of the convergence in traded goods prices occurred after 1998, the period during which the euro was introduced and national currencies were withdrawn from circulation. rogers ’ evidence therefore suggests that the increased integration of product markets in europe has been an ongoing process, which may have been assisted by the adoption of the euro but for which a common currency has hardly proved

the ratings framework that applies to all large holding companies. a firm ’ s supervisory rating, which is confidential, is important because it affects things such as the firm ’ s ability to engage in mergers and acquisitions and to enter new lines of business. just over a year ago, the board began implementing a new ratings framework for large holding companies called the large financial institutions ( lfi ) ratings framework. the lfi ratings framework focuses on three components of a firm ’ s operations : capital, liquidity, and governance and controls. we inaugurated the lfi ratings framework for liscc firms in january 2019 and for other large holding companies at the beginning of this year. as we gain more experience with lfi, we will be paying close attention to how the new rating system is working and whether it is achieving its intended purpose. there are two features of the ratings system that i will be particularly interested to monitor, and which may well require adjustment. these are the embedding of qualitative “ risk management ” standards in the capital and liquidity components of the ratings ( as opposed to standardized quantitative measures of capital and liquidity adequacy ) and the ascetic principle by which a firm ’ s “ well managed ” status is determined by its lowest component rating, no matter how good the bank is at everything else. regarding our stress tests under the comprehensive capital analysis and review ( ccar ), i 4 / 7 bis central bankers'speeches continue to look for ways to make the tests more transparent without making them game - able and without diluting their potency as a supervisory tool. i will mention three of these transparencyenhancing ideas. first, i expect that we will continue to provide more transparency on the models used in ccar. we started providing improved transparency on models last year, and as i have previously said, we will remain on that path until we have released substantial details on all of our key models. we also continue to consider ways to increase the transparency around the scenarios we use in ccar, including, for example, by modifying our scenario design policy statement to provide greater transparency on the design of the global market shock component of the stress tests. second, i expect that as part of the stress capital buffer, we will give banks significantly more time to review their stress test results and understand their capital requirements before we demand their final capital plan. firms are currently permitted to revise and resubmit their capital plans after receiving their stress test results. but it