, up from 12 percent in 2006 and 6 percent in 2004. however, i would like to issue a note of caution here. the fact that counterparties post abss as collateral with the eurosystem does by no means imply that those assets are refinanced on a one - to - one basis by us. the majority of national central banks operate with a so called “ pooling system ”, in which much more collateral can be deposited with the central bank than counterparties actually need to cover their outstanding credit with the eurosystem. in fact, during the turmoil precautionary buffers have increased very significantly, and there is on an aggregate level a large amount of over - collateralisation in collateral pools held with the eurosystem. hence, only a part of the abss deposited as collateral with us are effectively refinanced in our temporary operations. nevertheless it is fair to say that the ability to use abss as collateral with the eurosystem helps counterparties to hedge the refinancing risk of those assets. one phenomenon which shows to what extent the primary and secondary markets for abss have become dislocated since the outbreak of the turmoil is the fact that many abs transactions were not placed in the public market but taken onto the balance sheet of the originator and / or privately placed. indeed, as shown in chart 5, issuance of publicly placed securitised products in europe declined substantially in august last year and has since september hovered around a very low level per month. at the same time, deals that have been privately placed or retained by the originator have been consistently higher than public issuance since august, reaching a peak of around €90 billion in december 2007. the eurosystem ’ s collateral rules may partly explain why at least euro denominated securitisation issuance has not come to a halt notwithstanding the withdrawal of third party investors. as indicated before, we accept only those abss for which the transfer of underlying assets has been achieved via a true sale and where the issuing entity is bankruptcy remote from the originator of the transaction. these requirements should in principle ensure the de - linkage of the issuer from the originator. nevertheless, these requirements do not rule out that counterparties may use abss as collateral with us which they have originated themselves and retained on their balance sheet. the possibility for banks to use as collateral abss that they have originated themselves may have prevented a complete shut down of

##ing the lasting attractiveness of the euro area for long - term financial investments by non - residents. this also requires that other economic policies contribute to a favourable environment, through structural measures aiming at increasing flexibility in the labour market and efficiency in the markets for goods, services and capital. i have emphasised the effects of the eurosystem ’ s monetary policy on the volume of savings and its consolidation. the creation, with the euro, of a vast currency zone also contributes to a more efficient management of savings. 2. the creation of the euro is leading to larger and more integrated financial markets, improving the allocation of financial savings. the creation of the euro has accelerated the development and integration of the capital markets in europe, which have been helped along in recent years by financial liberalisation and technological innovation. in effect, the single currency has removed the exchange risk between the countries of the euro area and is facilitating the standardisation of debt instruments and their management on a much larger scale. this integrating effect of the euro has been most evident in the money market, by virtue of, in particular, the establishment of the large - value payment system target, made available to the banks by the european system of central banks. this integration has shown itself in, for example, the rapid adoption by the market of reference rates for the euro area, such as the eonia overnight rate or the euribor rate for maturities of less than one year. above all, we have seen a total convergence in short - term interest rates within the euro area. in the bond markets, the integration of the markets remains incomplete, owing to : national differences relating to property rights over securities ; taxation, accounting and supervisory regulations ; and payment systems ( which are also hindering the integration of the short - term securities markets and repo markets ). the integration of the bond markets is nonetheless progressing. first, we have seen european bond indexes become standardised. second, the differences in rates between sovereign issues within the euro area fell substantially in 1998. furthermore, 1999 was characterised by a spectacular growth in euro bonds issued by private non - financial firms ( a threefold increase, over the first ten months, compared with the same period in 1998 ), and an increasing share of bonds being issued by small and low - rated companies. in addition, integration in the stock markets is progressing, although they have to overcome barriers of the same kind as those i have just mentioned. in addition to the closer links between stock market firms,