or the types of operations changed. looking ahead, we can already start thinking about a financial risk management framework that will be appropriate for a central bank that has returned to a more conventional environment for the conduct of monetary policy, while still following these principles. i now look forward to the panel discussions, which will pick up on some of those issues in more detail, and to hearing your views. 1 treaty on the functioning of the european union. 4 / 4 bis central bankers'speeches

, or impose reorganisation measures. central banks may take actions aiming at restoring normal liquidity conditions in money markets or at ensuring the smooth operation of market infrastructures. finally, the third component, namely crisis resolution, relates to the arrangements aiming at an orderly handling of a financial institution facing solvency problems and the protection of the rights of creditors, notably depositors. in this case, treasuries have also an important role to play if and when the injection of public money is required. there is evidently a close interrelation between these three components of the financial stability framework. for instance, the effectiveness of crisis management and resolution largely depends on the existence of an efficient supervisory and central banking framework able to identify and react at an early stage to potential threats to financial stability. conversely, the effectiveness of supervisory action depends also on the existence of appropriate arrangements to support an orderly exit from the market by insolvent institutions. indeed, the fact that institutions could exit the market if they are affected severely by a crisis provides a powerful incentive for them to optimise risk management and draw up proper business plans. at the eu level, a key element is the cross - border dimension which characterises all three components of the financial stability framework. this dimension calls for a smooth and efficient cross - border interplay within and among the set of authorities involved in crisis prevention, management and resolution. in this respect, as a general observation, i would only say that the existence of the eurosystem provides an extremely strong and effective decision making in the area of central banking, while the level 3 committees are expected to develop their own cooperative network in the field of supervision. 2. key developments in the european financial system against this background, let me point out that the european financial system has experienced fundamental developments in the past years, which have a particular bearing on the eu financial stability arrangements. i would like to highlight three of them. first, the overall progress in european financial integration. the ecb ’ s analysis, conveyed through our annual report “ financial integration in europe ” demonstrates that financial integration has advanced significantly since the introduction of the euro at the level of financial markets, market infrastructures and financial institutions. progress has however differed considerably across market segments. the euro area money market has been strongly integrated since the introduction of the single currency, supported by the integrated market infrastructure for large - value payments. as to the wholesale banking segment, there are clear indications of strong progress in financial integration as well. for example, the