barriers in this field. in addition, it is expected that the above mentioned initiatives to streamline the regulatory and supervisory interface for cross - border financial institutions will foster an enhanced cross - border provision of banking services, including in the retail segment. furthermore, in january 2008 the market - led initiative to establish a single euro payments area ( sepa ) was launched, which aims at achieving a fully integrated market for retail payment services in the euro area via harmonised technical standards and market practices, with no distinction between cross - border and national payments. the main priority at the current juncture is for all stakeholders to make every possible effort to achieve the full and timely implementation of sepa in order to ensure that a critical mass of retail payments will be made on the basis of sepa instruments by end 2010. as ecofin concluded in january this year, public authorities have an important catalytic function in driving the migration process to sepa forward, namely by supporting and explaining sepa in their communication with their national constituencies. in addition to this political task, they also have an operational role to play in becoming early users of sepa products and services. as initiators and receivers of high volumes of payment transactions, public authorities – such as national and local administrations, tax authorities, social security agencies and pension funds – are key stakeholders which can make sepa a success. we have noted that there is still a lack of information and awareness about sepa among the public at large. greater effort should be made to communicate the benefits of sepa to corporate enterprises and private customers at european and national levels. while we expect that the critical mass of retail payments will have moved to sepa payments by the end of 2010 on a voluntary basis, an official end - date for the migration period may need to be set, by which time the use of national credit transfers and direct debits should have been phased out. recent studies by the ecb and the european commission have clearly shown that a lengthy period of processing the old national and the new sepa instruments in parallel will be costly for both banks and their customers. therefore, this period of dual processing should be kept as short as possible. responding to the global financial market correction financial integration is proceeding not only within europe, but also at the global level. financial globalisation enables the international community to share significant benefits in terms of enhanced financial efficiency and economic growth, but it also makes the safeguarding of financial stability a more interdependent endeavour. effectively coordinated international action

##tification of the macroeconomic impact of integration of eu financial markets ”, report to the european commission. see the report on financial integration in europe at http : / / www. ecb. europa. eu / pub / pdf / other / financialintegrationineurope200804en. pdf. equity markets. a key obstacle to greater bond and equity market integration is the lack of a sufficiently integrated infrastructure for securities clearing and settlement in the eu. substantial progress has also been made on the integration of banking markets, namely in the wholesale and capital market - related segments. cross - border interbank loans have increased to almost a quarter of total interbank loans and euro area banks ’ holdings of securities issued by banks in other euro area countries have almost tripled over the past decade. by contrast, retail banking markets have remained fragmented so far. for instance, the cross - border share of loans to non - banks has more or less stagnated at a very low level, below 5 %. similarly, the cross - country dispersion of banks ’ interest rates on loans to nonfinancial corporations and households has remained relatively high, especially with regard to consumer loans. public sector action to foster financial integration further efforts are needed to complete the single financial market, particularly in those areas where integration is currently lagging behind, namely in the corporate bond, equity and retail banking markets. while i would like to highlight again the primary role of market - led action in this respect, public authorities should nevertheless strive to facilitate progress. i see three main priorities at the current juncture, namely to : ( i ) further enhance the eu institutional setting for financial regulation and supervision ; ( ii ) remove obstacles to cross - border securities clearing and settlement ; and ( iii ) enhance the eu regulatory framework and market infrastructure for retail banking. the european financial integration process presents a twin challenge for the eu regulatory and supervisory architecture. first, closer convergence of prudential rules and supervisory practices is needed in order to facilitate the efficient operation of cross - border financial institutions and to safeguard an effective pan - european level playing field. second, while financial integration increases the overall shock - absorbing capacity of the financial system it also increases the likelihood that financial risks may be cross - border in origin or nature. against this background closer cross - border cooperation in monitoring and addressing financial risks is of the essence. the eu has already taken important steps to foster regulatory and supervisory convergence and cooperation in recent years. the introduction of an enhanced