in turn, prompted firms to implement hierarchical management systems to coordinate their greater numbers of workers and machinery and to speed the flow of information between management and the factory floor. shorter delivery times, reduced inventory holdings, and a better match between production and orders were the beneficial results. similarly, to take advantage of the continuousprocessing technologies of the early 1900s, firms increased the scope of their operations, integrating forward into distribution and retailing and backward into materials processing. this vertical integration reduced transaction costs but required the development of new units within the firm that were not directly tied to production, such as advertising, accounting, and research departments. in the third productivity boom, large multinational and multiproduct firms arose to take further advantage of economies of size and scope. in this episode, firms created multi - divisional organizations, with each product or geographic division having its own manufacturing and marketing departments. such a structure was well suited to a firm with diverse activities as it allowed managers to respond to changes in preferences and technologies relevant to specific areas or products. because the implementation of new technologies often requires new capital, the productivity gains during these boom eras were also dependent on the development of efficient mechanisms to transfer capital to the entrepreneurs and firms best able to transform the potential of the new technologies into new goods and new production processes. in the productivity boom after the civil war, for example, the increased use of secured debt and preferred stock reduced the transaction costs associated with borrowers having better information than lenders about the risks of bankruptcy and provided firms with the external funds needed to support a rapid buildup in the capital stock. in the second productivity boom, the introduction of regular audited financial statements, rating agencies, and newsletters covering firm and industry developments further reduced investors ’ costs of acquiring information about firms ’ finances, which led to a sharp expansion in equity markets and the opening of a new channel of capital flows to that period ’ s large - sized innovators. similarly, the growth in pension funds, mutual funds, and brokerage houses during the productivity boom of the 1950s and 1960s reduced the costs of portfolio diversification and further increased the participation of individual investors and the flow of capital available to innovators. a fourth ingredient contributing to the productivity booms of the past was the availability of a workforce capable of realizing the possibilities offered by technological innovations. in the late 1800s, new technologies increased the demand for unskilled production workers and skilled white - collar workers. employers generally were able to satisfy these demands through

of national transactions. one of the causes was the lack of the appropriate technical infrastructure, discrepancies in information and business standards applied in individual countries and the willingness of the banking sector to gain financial benefits from higher fees for cross - border transactions. this problem was raised already at the very beginning of the implementation of the single currency in europe and the lack of visible and effective activities undertaken to change the situation encouraged the european union decision - makers to take regulatory action. the aim was to provide mechanisms for effective euro payments in the euroland and uniform principles for cashless payments. the policy stemmed directly from the lisbon strategy that assumed the creation of a strong european economy that would be able to compete on the international market. moreover, there were no specific activities in the banking sector to modernise payment systems. this induced the european commission to act. the main document that stimulated development in that area was regulation no. 2560 / 2001 of the european parliament and the european commission on cross - border payments in euro in the european union that established coherent legal regulations for all payment services to enable the application of various solutions and provided uniform technological and business standards for suppliers of payment services. the euroland ’ s banking community decided that the best way to fulfil requirements stipulated in the regulation was to implement self - regulating mechanisms and to establish the european payments council, an inter - bank organisation that coordinates and supervises works on sepa. sepa will be an area where citizens, entrepreneurs and other parties will be able to make and obtain payments in euro in the territory of europe – both cross - border payments and payments within the borders of the member states – according to the same simple rules, legal regulations and obligations regardless of the geographical location of the citizens and entrepreneurs. the main aim of the works on sepa, carried out by the european banking community, is to implement mechanisms for effective euro payments in europe and to treat this area as a local market with all its consequences, including transaction completion time and fees ( i. e. these parameters will be equal for national and cross - border payments ). the following assumptions have been made to achieve the objective : - a coherent and technically neutral ( i. e. independent of any specific type of devices ) legal framework should be provided for all payment services within the european union ( excluding cash handling and cheques ) ; this framework should allow for the implementation of various solutions, - uniform technological and business standards should be provided for suppliers of payment services, - self - regulating mechanisms