. i will come back to this point later on. the elimination of currency risk within the euro area has also had far - reaching effects on the equity markets. this is crystal clear when observing volatility patterns and portfolio allocation methods. as regards volatility patterns, recent developments seem consistent with the predictions of economic theory, where stock prices should reflect expectations of future dividends, interest rates and risk premia. it follows that the introduction of the euro should be associated with a reduction in differences in volatility across markets. indeed, a recent empirical study demonstrates that those countries whose stock exchanges had a structural high or medium volatility regime, converged towards those with a low volatility regime. from the point of view of the european stock market as a whole, this shows an improvement in global efficiency. as regards investment patterns, sector - diversification strategies have been defined as an alternative to country diversification. before emu, it was common practice for institutional investors to make geographical diversification their first priority, and, secondly, to select securities in accordance with a sectoral diversification pattern. there is some evidence that the “ home bias ” has weakened since the introduction of the euro. for instance, assets held by pan - european investment funds represented 25 % of total assets at the end of 2000, up from 12 % in 1998. the development of a genuine paneuropean approach is also illustrated by the introduction of various european stock indexes. the turnover on options based on these indexes - for instance, the volume of options traded on the eurostoxx50 contract - now matches the turnover of options based on well - established domestic indexes such as the cac in france. this provides evidence that large investors are looking for - and actually have recourse to - hedging products that are suited to a cross - border oriented strategy. however, this evidence of a strong impetus towards integration does not necessarily support the argument that a brand new asset allocation is overwhelmingly dominant. let me emphasise two aspects. first, pan - european sectoral strategies have also embraced non - euro area stocks in order to reach an appropriate level of diversification. this is the case in sectors such as pharmaceuticals, or telecom equipment, with stocks listed in non - euro area countries such as switzerland, the united kingdom and sweden. this is in line with some theoretical assumptions, which are stating that currency risk is outweighed by the risk - return parameters, as far as investing in e

, at least in terms of its causes, non - financial in nature. this is notably the result of the regulations that we have implemented and reinforced over the last ten years. and it is what now gives us greater leeway to ease certain capital requirements, such as the counter - cyclical buffer, and to push back the entry into force of the basel iii accords by one year to 2023. all these measures should be considered in light of the – often heated – discussions on the degree of financial solidarity in europe. arguably, europe could perhaps do more, but let ’ s not forget that it is already doing a great deal, thanks to major efforts from the eurosystem or the easing – agreed quickly and unanimously – of the stability and growth pact, which gives natural priority to national action. if we consider a possible role for the european solidarity mechanism ( esm ), the amounts involved – around eur 410 billion – would certainly be significant. however, the support provided by the ecb alone represents eur 1, 050 billion on the markets and up to eur 3, 000 billion in bank liquidity. furthermore, the monetary union allows italy and spain to borrow at a far lower interest rate than before the euro. the truth is that questions of european financial solidarity will mainly come in the post - crisis period, which i shall now address. 2. 2 initial strategic thinking on the post - crisis environment beyond the present emergency and consensus, we must start to consider “ postcrisis ”. it raises some very open questions, some of which are premature. let me begin, very simply, with what we know and what we do not know : page 5 of 8 we know that growth will be strongly negative in 2020, then positive in 2021. however, we do not know the numbers involved : they depend on the peak lockdown period – 1. 5 % of gdp is lost with every two weeks –, our ability to bounce back afterwards, and the chain of events with regard to public health and the economy in the rest of the world. we now know that despite our initial hopes, we will not suddenly go from the current phase of general lockdown to a final phase of complete freedom of movement. between, there will be a phase 2 of relative lockdown, which will gradually be wound down, potentially over a long period of time. however, we do not yet know how : this is where the interaction between the battle for public health and the battle for the