procedures, market participants have on various occasions expressed the view that the ccbm is not yet able to meet all of banks ’ needs. taking note of these trends in collateral business practices, the eurosystem has invited market participants to rethink current arrangements by focusing on possible future alternative cross - border collateral facilities. another obvious example in the area of providing central banking services is our payment system, target, which has clearly fostered european financial integration. target was operational from the first day of monetary union as a platform for balancing liquidity surplus and deficits. target today represents around 90 % of the total traffic in large - value payments in euro and is one of the two largest wholesale payment systems in the world, alongside fedwire in the united states. and target2 will further improve financial integration, as it will enable the provision of a harmonised level of services across europe, supported by a single price structure for domestic and cross - border payments and new functionalities to enable banks to better integrate their euro liquidity management. our next target2 progress report, to be issued in november 2005, will provide further information on our work. 3. 4 acting as a catalyst for private sector activities i now turn to the fourth way in which we contribute to the process of european financial integration. in areas such as standard - setting and the establishment of common infrastructures, cooperation between private agents of the financial sector is as necessary as competition. however, cooperation often fails to materialise without the aid of a catalyst. in most countries, the central bank plays the crucial role of catalyst, thanks to its acknowledged 9 / 11 competence and objectivity and the numerous contacts with market participants which ensue from its basic tasks. with regard to financial integration in the euro area, the eurosystem can assume such a catalyst function in several areas. let me mention two examples. having touched, some moments ago, on the wholesale payment system, let me also express the eurosystem ’ s support for the integration of retail payments, i. e. for the banking industry ’ s initiatives to create the single euro payments area ( sepa ). a real sepa will benefit consumers, corporates, banks, and the economy as a whole. the european payments council, the main body administering the sepa project, has declared its intention to deliver pan - european payment instruments by the start of 2008, i. e. the “ sepa for citizens ”. by the end of 2010, we expect progress to have

3. 2 advising on the legislative and regulatory framework for the financial system as we see it, the basic task of public authorities with regard to the process of financial integration is to create a framework whereby, generally speaking, all potential market participants in a given financial instruments or services market, are subject to a single set of rules when they decide to deal with those financial instruments or services, have equal access to this set of financial instruments or services and are treated equally when they operate in the market. the eurosystem is fully committed to this principle of integrating financial markets and the financial system as whole, both in the euro area and the european union. we are committed to it both because it is required by european law and because we think it is good for the economy of the euro area and the european union, and for the best possible functioning of the level playing field in this sector. in line with this commitment, we also advise on the legislative and regulatory framework for the financial system. let me give you a few examples. very recently, at the start of august, the eurosystem provided an opinion in response to the european commission ’ s consultation on the priorities for financial services policies over the next five years. 5 as detailed in our opinion, the eurosystem supports the key policy orientation of the green paper, in particular the proposal for “ better regulation ” based on open, transparent and evidence - based policy - making, and the need to focus on the consolidation and consistent implementation of the legislative framework for financial services. to this end, we are of the view that the potential of the lamfalussy framework should be exploited as far as possible. in this respect, let me also recall the position expressed earlier this year by the eurosystem in relation to the review of the so - called lamfalussy process. 6 with regard to the supervisory framework, the eurosystem fully supports the commission ’ s view that the current institutional set - up should be exploited to the maximum extent before any potential structural change is considered. in particular, the eurosystem agrees that the main policy objective in the area of financial supervision is twofold : first, to enhance the competitiveness of eu financial markets and institutions and to facilitate the development of cross - border finance both in terms of institutions and in terms of products and services ; and second, to ensure the effectiveness of standards for oversight and supervision in a more integrated financial system. london economics, “ the costs and benefits of integration of eu mortgage markets