issuers across the euro area have privileged access to a large number of investors in a large and open market place. this has paved the way for new firms and relatively small firms to obtain finance from stock markets that have specialised in providing funds to young and innovative firms. we have seen an astonishingly large number of new listings in recent years. oversight of financial markets and recent institutional and regulatory developments let me now turn to the issue of the oversight of financial markets and recent institutional and regulatory developments. the internationalisation of markets is posing new challenges for supervision. the new challenges posed by recent market developments come mainly from two sources, technological advances and the increased competition and market integration triggered by the introduction of the euro. until the 1980s, financial activity was conducted within heterogeneous frameworks. each financial system was characterised by a different currency, legislation and supervisory structure. in general, each sector of the financial industry – banking, securities and insurance – had its own supervisory agency. financial innovation has significantly blurred the distinction between products supplied by different intermediaries, and technological advances have had a major impact on the importance of the physical location of the market players, since the two sides of the transaction and the intermediary need not be close geographically. the concept of the market itself has drastically changed, since it has become an entity not clearly identified by a physical location. for example, a large part of the regulation relates to the definition of a market as a physical entity. in today's financial systems it is possible to have markets, like the foreign exchange market, that do not a have a geographical location. public policies have progressively adapted to the new market environment, increasing cross - border and cross - sectoral co - operation between competent authorities and shaping new, less cumbersome and intrusive regulatory and supervisory tools. the introduction of the euro has further eroded sectoral and geographic segmentation, thus initiating debates in many countries on the most efficient institutional arrangements for prudential supervision and financial stability. the single agency approach has recently gained ground as a response to the breakdown of sectoral distinctions in the financial industry. sweden and denmark within the european union and canada and norway outside it were the first countries to adopt such a model. this solution attracted even more attention with the reforms in the united kingdom establishing the financial services authority. the developments which have occurred in the market seem to favour the single supervisor approach. in fact, financial products are now mixed and the same economic function is performed by contracts supplied by

by basing its activities on common guidelines and by agreeing on high - level standards for the eurosystem. with these aims in mind, they demonstrate the eurosystem ’ s commitment to credibility, trust, closeness to the citizens of europe and the shared identity of the eurosystem. the eurosystem has explicitly committed itself to applying effective and efficient organisational structures and working methods. this means that all members in the eurosystem strive at performing their functions with a spirit of cooperation, teamwork, efficiency, effectiveness and full transparency. we consider these values to be crucial to the successful functioning of the system. the principles also stress that the eurosystem activities shall be performed by exploiting synergies, avoiding duplications and being cost efficient. a very tangible example of implementing the organisational principles concerns the establishment of a common eurosystem procurement coordination office ( epco ). epco will facilitate the adoption and exchange of best practices within the eurosystem, develop a working infrastructure enabling purchasing power to be pooled, and coordinate the eurosystem procurement agenda. just imagine the significant synergies that could be achieved for example in the field of it procurement, where the benefits would not only apply to pooling purchasing power but, at the same time, could bring the significant advantage of implementing systems / applications which are fully compatible across central banks which, in turn, would substantially enhance and facilitate cooperation. eurosystem central banks will participate in epco on a voluntary basis ; and also non - euro area central banks have been invited to join this initiative. central banks expressed their interest in hosting epco, and participated in a competitive process. i mention this with particular pleasure here at the banque centrale du luxembourg, since the governing council decided in december 2007 to award the hosting of epco to the banque centrale du luxembourg until to end - 2012. epco demonstrates that the before mentioned ( organizational ) principles are, indeed, pursued and implemented, but also that all ncbs participate on a level - playing filed. ecpo is indeed a tangible proof of the team spirit at work within the eurosystem. the eurosystem continues to strive for efficiency and effectiveness, using to the full extent the resources available in the eurosystem. further evidence of this are the major eurosystem projects and initiatives currently either already in operation or under development. allow me to mention just a few examples. target2 provides a centralised payment system based on a single