, the establishment of cmu will allow businesses to enjoy a greater range of funding choices and help reduce the link between a firm ’ s location and its cost of funding. in europe, imf ( 2013 ), “ towards a fiscal union for the euro area : technical background notes ”, september 2013. bis central bankers ’ speeches the share of financing obtained in capital markets stands at 25 %, whereas this figure is 80 % in the united states. cross - border frictions also impede the ability of firms to gain access to financing from across the union. by removing fragmentation in capital markets, cmu will allow businesses and households to access a larger variety of funds, and stimulate growth. target2 - securities will form the foundation for these two pillars, and for the establishment of the capital markets union. if we consider the fact that settling a cross - border transaction in europe used to cost up to ten times as much in europe as it does in the united states, the importance of our new settlement platform to the deeper integration of capital markets becomes evident. indeed, t2s will facilitate cross - border bonds and equities trading, which means that we are already making progress towards completing the cmu. moreover, as part of its harmonisation agenda, t2s has taken steps towards many of the goals in the cmu agenda, such as harmonising withholding tax procedures and resolving conflicts of law. in this sense, t2s is a demonstration of the market ’ s willingness to achieve deeper integration on a european scale. but legislative and regulatory action will also be required if the remaining barriers in the field of market infrastructure are to be removed. this is because financial markets in europe are subject to a vast network of legal rules, which sometimes conflict on issues such as taxation requirements, insolvency procedures and corporate governance. for full integration, we need to have a single rulebook for capital markets, and all market participants must have equal access to markets. it is particularly important to emphasise the rule - based nature and legal side of this system when considering the greater risk of contagion which may accompany the development of the capital markets union. the further integration of europe ’ s financial sectors may enhance systemic risk across the continent, meaning that ultimately, a single regulatory supervisor and macroprudential toolkit for capital markets should be established. this is mostly a longterm consideration ; yet we must remember that legal tools will be necessary to bring out the full benefits of deeper integration

in the euro area. as the ecb ’ s president recently stated [ 4 ], our models show that half of the recovery in the euro area ( as a percentage of gdp ) in the past two years is attributable to our monetary policy and half is mainly the result of lower oil prices. • our monetary policy has also improved financing conditions and remedied financial fragmentation. as a result of our non - standard measures, credit conditions have improved across the euro area [ 5 ] : from may 2014 to january 2016, interest rates on loans declined significantly ( by 84 basis points for non - financial corporations and by bis central bankers ’ speeches 68 basis points for households ). furthermore, the steepest decline observed was in the most fragile economies of the euro area. • finally, our decisions have helped maintain trust in the single currency in a context of financial instability and high uncertainty. indeed, not only has market confidence in the euro remained strong, but public confidence has too : according to eurobarometer data, trust in the euro is virtually unchanged compared to its pre - crisis level. the measures we announced on 10 march 2016 form a very substantial package which gives priority to loans for households and businesses, and thus supports the recovery. they underline our determination to fulfil the mandate entrusted to us by the people of europe : to bring inflation back to nearly 2 %, and they show that we have no shortage of tools. but the ecb cannot single - handedly create the conditions for a sustainable recovery in growth. this requires a concerted effort in terms of economic and fiscal policies. while unemployment started to decline in the euro area in january ( 10. 3 % compared with 11. 9 % two years earlier ), ambitious reforms are still needed in most of the euro area economies, given the low growth potential and high structural unemployment. the measures to raise productivity and to improve the business environment, including public infrastructure, are essential to increase investment and boost job creation. it ’ s true that there is limited room for manoeuvre in terms of using fiscal policy to support growth, and the fiscal rules cannot be stretched to the point where they would lose all their credibility. but while some countries have such margins under the stability and growth pact ( which they are already partly using to support refugees ), all countries can make their tax structures more favourable to growth and redirect public spending towards investment, research and education. our monetary policy provides a favourable context for these reforms. [