coming from our monetary policy diffuse homogeneously through financial markets across the euro area as a whole. the financial crisis made clear, however, that unchecked financial integration also poses risks to financial stability. it increases financial complexity, the risk of cross - border contagion and the risk of sudden stops in capital flows. these risks are particularly pronounced in the absence of a strong institutional framework. 3 such risks have been illustrated both internationally and within the euro area in the recent years of crisis. 2. financial integration in europe : salient facts and figures let me now turn to financial integration in europe. overall, the degree of financial integration has progressively increased in the euro area since the introduction of the euro. however, the financial crisis of 2007 to 2010 and the subsequent euro area sovereign debt crisis reversed this trend to some degree. 4 for the reason i gave earlier, these developments have been particularly problematic for the eurosystem. i will refer to these developments when discussing the effects that the banking union should have on more and better financial integration. let me show you some indicators. see g. moec ( 2013 ), “ the trouble with smes – no quick fix ”, deutsche bank research note, 8 march. in non - oecd countries, the welfare gains of international capital mobility are however found to be much smaller than those of a take - off in domestic productivity, see p. o. gourinchas ( 2006 ), “ the elusive gains from international financial integration ”, review of economic studies, 73 ( 3 ), 715 – 741. see fecht, f., gruner, h. p, and p. hartmann ( 2007 ), “ welfare effects of financial integration ”, cepr discussion paper no. 6311, 1 – 35, and fecht, f., gruner, h. p., and p. hartmann ( 2012 ), “ financial integration, specialization, and systemic risk ”, journal of international economics, vol. 88 ( 1 ), 150 – 165. see the ecb ’ s financial integration report ( 2012 ). bis central bankers ’ speeches an integrated money market is important to ensure a balanced transmission of the ecb ’ s monetary policy stance. it is also the market segment in which the financial crisis first began in august 2007. the money market has become increasingly impaired, especially across borders. the standard deviation of euribor rates across countries within the euro area has moved consistently above the

willem f duisenberg : the first nine months of the euro cash era speech by dr willem f duisenberg, president of the european central bank, on the occasion of the international imaging industry summit, schloss bensberg, bergisch - gladbach, 24 september 2002. * * * ladies and gentlemen, it is a great pleasure for me to be invited to the international imaging industry summit, on the eve of the world's leading trade fair " for the photographic and imaging sector ", as the website says. let me start by drawing a parallel between the photokina and central banking, which, i must admit, is not an easy task. both activities – and this is an important point – are future - oriented. in fact, a key objective of the photokina exhibitors is to present " the future " here and now, in the shape of new products and new technologies. also for central bankers, a future - oriented decision - making is crucial ; in fact, it is an important element of a successful monetary policy. a forward - looking approach was also taken by the creators of the euro. the single currency has been used as a non - cash payment instrument and unit of account since the start of 1999 and as a physical payment instrument since the beginning of this year. the introduction of the banknotes and coins was the last step in a process which formally started at the european council held in maastricht in december 1991 and led to the signing of the maastricht treaty in 1992. euro cash has now been in circulation for almost nine months and, according to a recent survey by the european commission, around 85 % of the population of the euro area countries found the changeover to the new money a straightforward process. it was completed by the end of february 2002, when the euro banknotes and coins became the sole legal tender in the 12 countries. in my speech today, i shall not only look to the future, but shall also look back a little, over the first nine months of the euro cash era. putting more than eight billion banknotes and close to 39 billion coins into circulation was a logistical operation of truly gigantic proportions. that it went off so smoothly was thanks to the joint efforts of all parties involved and especially to the currency's good reception by the public. first, i shall address developments in currency in circulation before, during and after the cash changeover. second, i shall consider the use of the euro outside the euro