a few months earlier, the system had announced a clear definition of its price stability objective, namely an annual increase in the harmonized index of consumer prices in the area as a whole below 2 %. the system also announced details of its monetary policy strategy, i. e. the set of macroeconomic indicators that it would use in assessing the appropriate level of interest rates. already in its first two years, the eurosystem has shown that it follows a pragmatic and forward - looking approach in its policy. in april 1999, we cut interest rates by half a percentage point, in the light of the very low rate of inflation and the international uncertainties then prevailing. as economic prospects brightened up substantially from the summer of 1999 and inflationary pressures emerged - not least due to the more than doubling of world oil prices - the ecb responded by a series of interest rate increases between november 1999 and october 2000, which lifted policy rates by a total of 2 1 / 4 percentage points. since then, monetary policy has been in a waiting position, given increasing signs of fainting price pressures against slowing worldwide economic growth. ladies and gentlemen, the positive effects of the euro are felt in numerous ways. international financial crises are no longer able to upset intra - european exchange rate relations and trade. even ahead of the formal start of monetary union, the 1998 international financial crises did not cause any major disturbances in european exchange markets. recall that, just a few years earlier in the first half of the 1999 ’ s, major devaluations of some european partner currencies put " hard currency " countries such as austria in an unfavorable international competitive position. the euro ensures that such " monetary shocks " are now a thing of the past. in addition, the euro has unified twelve formerly segmented financial markets into a huge single market for capital, where companies find a broad range of financial services including risk and venture capital at more favourable terms than before. as a result, the euro has also made europe more attractive as a business location. enterprises settling down in the euro area operate in a single market of more than 300 million people. for consumers, the euro creates a single market with full price transparency. at the international scene, the euro is increasingly used as an investment, issuing, reserve and anchor currency. just to give you some examples : the euro / us - dollar foreign exchange market is the largest in the world, around 30 % of international debt securities are issued in euro and the share

ewald nowotny : taking stock of the progress made towards a european banking union opening remarks by prof dr ewald nowotny, governor of the central bank of the republic of austria, at the 42nd oenb economics conference, vienna, 12 may 2014. * * * ladies and gentlemen, on behalf of the oesterreichische nationalbank, i am very pleased to welcome all of you to the oenb ’ s 42nd economics conference here in vienna. i am especially honored to welcome sonja steßl, state secretary in the austrian ministry of finance, and this year ’ s keynote speakers, axel a. weber, chairman of the board of directors of ubs, and vitor constancio, vice - president of the european central bank. we are once again fortunate to have a distinguished panel of speakers and discussants consisting of academics, policymakers from supervisory authorities and central banks as well as financial practitioners. thank you for contributing your ideas and research to our conference. i would also like to take the opportunity to thank the staff members of the oenb for their great efforts in organizing this event. at last year ’ s conference, we addressed the changing role for central banks, and today and tomorrow we are going to follow up on this theme, so to speak, by taking stock of the progress we have made toward a european banking union. central banks have assumed additional responsibilities in supervision, and conferring the role of single banking supervisor in the euro area on the european central bank is one of the cornerstones of the system of bank regulations that is commonly referred to as “ banking union. ” at this year ’ s conference, we will not only assess the effects the upcoming banking union will have for central banks, but we will also examine the consequences for economic policy, for the banking sector and for the economy at large. the term “ banking union ” has been coined in analogy to monetary union – and most likely also to political union, which continues to be an overarching aim in europe. what does banking union stand for in a nutshell? it means that the key instruments of banking policy are being centralized at the european level with a view to strengthening and extending the supervision and the resolution of banks. the aim of the single supervisory mechanism ( ssm ), designed to reduce the probability and severity of banking crises, is mainly preventative, whereas the single resolution mechanism ( srm ) and the bank recovery and resolution directive ( brrd ) are