granted to resident enterprises is, at over 100 % of the euro area ’ s gdp, twice as high as the corresponding figure for the united states ( 47. 5 % ). in japan, bank loans, which amount to 92 % of gdp, also play a relatively important role in the financing operations between different economic sectors. 2 by contrast, the us economy may be described as a securitised economy ; much of the financing is done not through the banking system but directly on the securities markets. at the end of 1999 outstanding domestic debt securities in the united states were valued at over us $ 15, 000 billion, or 161 % of gdp. in the euro area they came to around 90 % of gdp and in japan to 131 %, although in for the source of these figures, see ecb, the euro area one year after the introduction of the euro : key characteristics and changes in the financial structure, monthly bulletin, january 2000, pp 35 - 49. for more on this see also oecd financial market trends no 76, july 2000, main changes in the financial structure of the euro - zone since the introduction of the euro, pp 109 - 127. the latter case it should be borne in mind that many of the debt securities were issued by the public sector. it is also interesting to observe the amount of financing which companies obtain on the capital market. whereas euro - area corporates have issued debt securities amounting to only 3. 5 % of gdp, the corresponding ratio for japan is four times as high and for the united states eight times as high. the figures for equity market capitalisation confirm the initial impression that the securitisation of lending has an upward potential in the euro area. expressed as a percentage of gdp, market capitalisation in the euro area is only about half as large as that in the united states or in japan. however, while it is true that the financial system in the euro area is still more oriented towards the banking industry, bond and equity markets have already begun to play a bigger role. there is also reason to believe that the presumed dominance of bank loans has been exaggerated and the degree of equity financing correspondingly underestimated. new data for germany show that at the end of 1998 the volume of bank loans to non - financial companies exceeded equity financing by a mere 5. 3 %. in addition, the aforementioned figures provide only a snapshot at a certain point of time and, as such, do not reflect changes in their status

second place in this segment after the dollar, the gap between the two is large. imf estimates have set the volume of foreign reserves held in euro at the end of 1999 at 12. 5 %, compared with a us dollar share of 66. 2 % and a yen share of 5. 1 %. 6 however, one could argue that the euro has held up well in comparison with its predecessor currencies. v at this point, allow me to summarise while at the same time casting a glance towards the future. with the introduction of the euro, the balance of forces within the international financial system has shifted. a second currency now exists alongside the dollar which - given the size and economic strength of the euro area ’ s financial markets - has the potential to become a significant currency with global status. the extent to which the euro will actually realise this potential also depends on political decisions taken within the euro area and on the confidence which market participants world - wide place in the new currency. thus the first priority must be to guarantee the internal stability of the euro. this constitutes the primary objective of the eurosystem, which has already reacted to imminent inflation risks with several interest - rate increases. however, economic and fiscal policy makers, who are capable of accelerating economic momentum in the euro area through the appropriate structural reforms, are also called upon to act. much has already been undertaken or set in motion, as in the case of taxation policy. however, the markets have not ( yet ) rewarded these efforts. important policy initiatives still have to be introduced in the financial markets as well. the introduction of the euro has succeeded in ending the segmentation into different national currency zones and in intensifying the competition in individual market areas. some obstacles to the integration process only really became apparent once this had been achieved. if one is truly to speak of uniform financial markets in the euro area, priorities for the future will have to include further improvements in the infrastructure of the equity and bond markets and a standardisation of legal and administrative frameworks. transaction costs between two euro - area countries should not entail higher costs than those of purely domestic transactions. moreover, transaction costs within the euro area must not be higher than the international standard, if the euro is to prosper in international competition with other currencies. let me conclude by emphasising that the financial market trends in the euro area should also be seen in the light of the developments in the “ real ” sector of the economy. the financial