to gross state product ( the equivalent of our gdp ), the credit channel would smoothe out 23 % of such shocks and the federal government, through the fiscal channel, 13 %. 25 % of the shocks would not be smoothed out. 1 hence in the united states financial markets and financial institutions would contribute 62 % to the absorption of state idiosyncratic shocks. the effect is very substantially higher than the effect of the federal budget. we see from the us example that the financial channel can be much more important than the fiscal channel and that is a particularly important additional reason to speed up financial integration in europe. financial integration is also very important for stimulating economic growth in europe via its impact on the development of the european financial system. financial development refers to the process of see p. asdrubali ; b. sorensen ; o. yosha, “ channels of interstate risk sharing : united states 1963 - 1990 ”, the quarterly journal of economics, vol. 111, no. 4, november 1996, pp. 1081 - 1110. financial innovation, and to the institutional and organisational improvements in a financial system that reduce asymmetric information, increase the completeness of markets, add possibilities for agents to engage in financial transaction through ( explicit or implicit ) contracts, reduce transaction costs and increase competition. progress in financial development can obviously also occur in perfectly integrated markets. therefore, by speeding up the reallocation of capital from declining to evolving and promising industries – the schumpeterian process of “ creative destruction ” – both financial integration and financial development positively influence the efficiency of a financial system, ultimately leading to a higher potential for economic growth. the introduction of the euro has already brought about important benefits resulting from increased financial integration. and the process of european financial integration and development is still ongoing : a research study by london economics estimates the benefits of the full integration of european bonds and equity markets to be around 1 % of gdp growth over a ten - year period, or approximately €100 billion. 2 this brings me to the next point i would like to make, namely the identification of major achievements and challenges of european financial integration. achievements and challenges of european financial integration let me first draw your attention to a new report entitled “ financial integration in europe ”, which the ecb published for the first time just three weeks ago. 3 the main purpose of this report, which will become an annual publication, is to contribute towards the advancement of european financial integration and to raise public awareness of

is – and i did say this before – we have to restore confidence. investors, entrepreneurs have to go back being confident in the future and in the resilience and robustness of europe. and you say it for all countries. some people wonder if we are assured about the survival of the euro. what answer do you expect from someone who said that we will do whatever it takes to preserve the euro within our mandate? so you still say it. the euro is irreversible. the euro is irreversible and we will do whatever it takes within our mandate to make sure it will happen. not a too strong euro. the euro started to weaken, will it continue in this path? well, you know we never comment specifically on exchange rates. i ’ ve said many times that the exchange rate as such is not a policy target, but it ’ s very important for price stability and for growth. at the present time, the exchange rate movement reflects the different path of monetary policies in europe versus the monetary policies in other important countries. our monetary policy will stay accommodative through time for an extended period of time while other countries ’ monetary policies may gradually acknowledge that recovery is taking place in their countries. you were speaking about structural reforms. in france, they ’ re starting. you don ’ t speak about government policies. but what do you say? should the reforms happen? should they still be implemented even if not all people agree with them? otherwise, there are risks. yes, there is a sentence in the jackson hole speech where i said that the risks of doing too little are bigger than the risks of doing too much and this applies to structural reforms as well. many countries, most countries in the euro area have planned these reforms for a long time, have designed these reforms. what is needed now is action. they have to implement these reforms and each country has its own specific agenda. bis central bankers ’ speeches otherwise you see anti - europe political parties rise : in germany, in greece and even in france with marine le pen that argues for the return to national currency. it seems that you are worried, what is the best answer to this? the best answer to this, but also to the sense of lack of hope that the millions of unemployed people have in the euro area – the best answer is to do the reforms, implement the appropriate policies and monetary policy will do its task. you have the reputation to have an independent character. do you think