institutional framework, has not proceeded with the same speed and there continue to be clear differences according to the activity type. banking consolidation also raises sensitive moral hazard and crisis management questions, as painfully illustrated by the crisis. the securities markets showed strong growth in the years before the crisis and clear signs of integration, though not to the same extent as observed in the euro money markets. with the crisis, bond price indictors showed signs of more dispersion across countries in europe, but the question is whether this points to more segmented markets or rather increased risk awareness on the part of investors. very topical in this respect is also the cds market and its interaction with the underlying ( sovereign ) bond market. finally, the integration of a securities market depends to a large extent on the integration of the supporting market infrastructure. this is an area where the eurosystem and the european commission have taken significant measures, but integration continues to be affected by legal, fiscal and technical issues. an important set of issues on which the panellist may want to comment relate to the regulatory reform process, where the g20 provides the strategic impetus, the financial stability board ( fsb ) plays an important role in policy coordination, and the committees and working groups ( such as the basel committee on banking supervision, which is the emblematic global committee ) the review of specific international standards. important regulatory reforms are underway in europe, as well as in the united states, and i want to elaborate on them because they have important implications for the ecb. as you know, the proposed reform for the financial supervisory framework in the eu will be based on two pillars. the micro - prudential pillar, the european system of financial supervisors ( esfs ), will be composed of the national supervisors and three european supervisory authorities ( esas ). the european systemic risk board ( esrb ) will form the macro - prudential pillar. under the proposals of the european commission, the esas will carry out a range of activities, including the issuance of binding and non - binding rules which will provide the basis of a so - called “ single eu rulebook ”. the esas will further promote a consistent application of eu legislation and of a common supervisory culture, and provide for mediation in the case of disagreements between national supervisors. all this should lead to a more harmonised regulation and supervision across countries, and as a result also foster financial integration. for central bankers, the part of the reform which directly concerns them is the establishment

of the esrb, a new independent body that will for the first time carry out a comprehensive macro - prudential oversight of the financial system of the eu. the esrb will also issue risk warnings, and, where appropriate, recommendations, and follow up their implementation. this body will bring together the central bankers, the heads of the three supervisory authorities, the commission together with the supervisors of the 27 eu member states to regularly discuss and assess the financial stability conditions in the eu. in that respect, the esrb shows some keen similarities with the financial stability council in the proposed financial reform in the united states. the esrb is expected to support financial integration through its contribution to financial stability in the eu. indeed, if market participants are confident that the authorities take properly into account the interdependencies between countries and the various components of the financial system, they are likely to fully exploit the possibilities offered by cross - border activities in the eu. on the part of the ecb, i can assure you that we stand ready to support the esrb, in particular taking into account the important presence of the members of the general council of the ecb in the esrb and the fact that the ecb will provide the secretariat and analytical, statistical, logistical and administrative support to the esrb, as required under the legislative proposals. preparatory work at the ecb has been organised through the setting up of an ad hoc team and is under way so that the esrb can take up its work after its formal establishment. the ecb is in the process of enhancing its capabilities for monitoring and assessing financial stability risks. only a number of weeks ago, we reformed our directorate financial stability and supervision into a directorate general financial stability with more resources. in all this, we also try to draw as much as possible on synergies with existing work and resources, both within the ecb and the european system of central banks ( escb ), the constellation of the 27 national central banks of the european union. i would now turn to the panel and ask our guests to share with us their observations.