in investors ’ approach. empirical evidence suggests indeed that sector - related factors are playing an increasing role in price dynamics. as integration enlarges the range of potential investors, it also fosters the development of private equity and the financing of young and innovative firms, a trend that is obviously welcomed. 1. 4 behind the scene, supporting the evolutions that i just touched upon, market infrastructures have undergone radical changes. as an example, as regards trading infrastructures, the creation and expansion of euronext is a striking illustration of the on - going consolidation process : the euronext group now links the french, belgian, dutch and portuguese stock markets, and has concluded co - operation agreements with several other european markets. the group also significantly increased its presence on interest rates derivatives markets. this ongoing movement of consolidation affects securities clearing, settlement and depository infrastructures, as providers aim to propose an integrated transaction service covering the entire securities processing cycle. in the field of post - market infrastructures, clearnet is pursuing its pan - european expansion by completing its operational integration throughout the euronext area. the clearing house also reached an agreement with its italian counterpart, enabling it to offer central counterparty services for transactions executed on the italian government securities market. a similar consolidation process is taking place in the central securities depositaries ( csd ) area, paving the way for a more efficient functioning of delivery versus payment ( dvp ) procedures, and easier and safer settlement of cross - border securities transactions. this latter aspect is of particular interest for the eurosystem, as a smooth functioning of securities settlement infrastructures is key for an efficient implementation of monetary policy. structural changes, such as the setting up of euroclear ’ s single settlement engine, are of great interest in that regard : the so called single settlement engine ( sse ) by 2005 will enable participants to settle securities transactions on a delivery - versus - payment basis between the group ’ s different depositories, more effectively than today and at a lower cost, without changing their interface or procedure. moreover, the central banks of the five countries concerned are discussing mechanisms that would allow euroclear participants to settle all their transactions in central bank money and on a real - time gross settlement basis with the central bank of their choice. 1. 5 all these developments highlight the necessity to harmonise operational practices, to define common standards and to adopt new procedures for co - operation between supervisory authorities. to function properly, markets require a well designed legal

stanley fischer : a brief look at the israeli economy and the vital importance of employment address by professor stanley fischer, governor of the bank of israel, at the third annual jewish - arab business conference, herzliya, 13 november 2007. * * * since 2003 israel ’ s economy has been enjoying economic growth, and since 2004 gdp has been rising by more than 5 percent per year. at the same time price stability has been maintained, and the economy has shown impressive financial and economic stability. israel is well integrated in the global economy, exports are increasing and in the first half of 2007 reached about 45 percent of gdp, and the current account of the balance of payments shows a healthy surplus of about 5 percent of gdp. the economy continues to benefit from the inflow of investments from abroad, which halfway through 2007 had reached some 8 percent of gdp. the fact that the government can obtain knesset approval for the 2008 budget according to the targets it set, particularly in light of the implications that the credit crisis could have for the global economy, is an auspicious and important achievement. the positive economic developments are reflected in the labor market. the unemployment rate has fallen, and reached 7. 6 percent in the second quarter, a far cry from the level of about 11 percent in 2003, and this has occurred in the time when the rate of participation in the labor force rose from 54 percent to 57 percent ; a very important development. employment is of vital importance both economically and socially. economically, because employment per se contributes to economic growth ; socially, since one of the direct ways of dealing with poverty is to place those capable of working in employment. that is because there is a clear negative link between poverty and employment. in 2006, for example, the poverty rate among families with no wage - earner was about 76 percent ; among families with one breadwinner, about 37 percent ; and among families with two breadwinners, about 4 percent. these figures paint a very clear picture. poverty in israel, however, is closely related to israel ’ s demographic features. based on the central bureau of statistics ( cbs ) income survey, the majority of poverty is concentrated in two groups in the population : the arab sector and the ultra - orthodox sector ( haredi ). while the incidence of poverty among the jewish, non - haredi population ( based on the relative measure of poverty generally used in israel ) in 2006 was only 13 percent, among the arabs and the ultra - orthodox the rates were