, though, which seems to indicate that the markets believe – as i do – that these difficulties could be solved without far - reaching financial consequences. more recently, the problems confronting some of our main financial institutions have also had some influence. the belgian government – like several other european governments – had to recapitalise those institutions, which pushed up the outstanding public debt, and thus also the credit default swap rate for belgium, which is now some 26 basis points higher than for germany. anyway, as i said before, the increase in spreads vis - a - vis the german bund is a general phenomenon. one may fear that the recent financial turbulence will lead to a standstill or even a setback for european government bond market integration. so it might be useful to consider some initiatives to relaunch this integration process. here, we can refer to several reports written by the giovannini group. in a report presented in 2000, this group addressed the issue of " co - ordinated public debt issuance in the euro area ", arguing that the decentralised approach to public debt issuance was an obstacle to full market integration. different options for greater co - ordination were discussed, including the creation of a single euro - area debt instrument backed by joint guarantees, an option that could be beneficial for smaller member states, currently paying liquidity premiums. unfortunately, the group did not start any concrete specification of such options. i nevertheless notice that tomorrow you will be bringing up the subject of common issuance again. maybe your summit will give new impetus to this idea. in two later reports ( 2001 and 2003 ), the giovannini group focused on clearing and settlement infrastructures in the eu. it described clearing and settlement as an essential feature of a smoothly functioning securities market, providing for the efficient and safe transfer of ownership from the seller to the buyer. it identified a number of barriers to efficient cross - border clearing and settlement. since the start of emu, the ecb has taken a good many initiatives to provide payment and settlement facilities that foster market infrastructure integration and ensure the highest standards of efficiency and safety. first of all, i would like to mention target, the real - time gross settlement system for the euro, which, since its launch in january 1999, has contributed to the integration of euro - area financial markets, by providing its users with an area - wide payment infrastructure. in response to the growing demand from financial institutions for more advanced and harmonised payment and settlement services across

, what reforms seem necessary to stimulate financial sector development and, secondly, how can central banks secure financial stability in a globalised economy? these questions are all the more relevant, given the emergence of international financial centres in beirut, dubai, qatar and bahrain, among others. the increasing importance of cross - border financial flows means shocks originating in one financial market can quickly be propagated to other markets. to avoid contagion when financial instability occurs, national financial systems need to be adapted so as to be able to contain shocks originating in their own jurisdictions, while also being capable to weather external shocks. the imf - supported conference on financial sector reforms and prospects for financial integration in the maghreb countries in morocco in december 2006 concluded that over the last decade, all countries concerned have implemented reforms to modernise their financial sectors, allowing financial systems to develop and grow more resilient and sophisticated. however, according to the conclusions of that meeting, reform efforts should continue in the following areas : • firstly strengthening banking system soundness by reducing banks ’ nonperforming loan portfolios, ensuring adequate loan classification and provisioning, and adhering fully to internationally accepted prudential rules. • secondly enhancing competition in the banking systems by ensuring a level playing field for all banks, including through the restructuring of public banks and privatization, if warranted. • thirdly deepening financial markets through strengthening the regulation and supervision of securities markets, broadening the investor base, and improving transparency. • fourthly strengthening financial sector oversight by allowing greater autonomy to supervisory agencies and providing them with more resources to hire, train, and retain qualified staff. • fifthly bringing financial infrastructure in line with international best practice by establishing commercial courts, strengthening corporate governance, and fostering a sound credit culture. regional integration can reinforce the progress made in financial sector reform. useful lessons on regional financial integration can be learned from similar endeavours in other parts of the world. these experiences, particularly those of the european union, suggest adopting a gradual approach and underscore the importance of sound macroeconomic frameworks and healthy domestic financial systems for successful financial integration. i now turn to the second issue : the role of central banks in securing financial stability in a globalised economy. the objective of financial stability requires action on three fronts : prevention, surveillance and crisis management. concerning prevention, national and international authorities have concentrated on defining and working - out rules and standards aimed at improving the functioning of institutions, markets and infrastructures that are essential for