are indications that this rate has declined since the onset of the financial crisis. as such, further work could provide a clearer picture across a wider range of assets and markets, with triparty collateral management systems serving as a good starting point to better grasp the rate of reuse in secured financing markets. another important element that affects the availability of collateral assets is settlement arrangements and, here again, the eurosystem is working with the market to see how enhancements to settlement arrangements could overcome existing inefficiencies. given that settlement arrangements influence both the availability and mobility of collateral, i will move on to the topic of mobility and address settlement arrangements in parallel. mobility of collateral an important function of collateral in financial markets is that it should have the capacity to “ change hands ” when needed. thus, collateral should be mobile. inefficiencies in settlement arrangements, however, including at the level of financial market infrastructures, reduce the amount of assets that can be quickly mobilised and, therefore, the overall availability of collateral assets. the eurosystem, like other central banks, therefore supports and fosters initiatives that contribute to improving the availability and mobility of collateral, without overlooking the need to preserve transparency and legal certainty. let me mention first the initiatives within the eurosystem itself – target2 - securities ( t2s ) being the most notable. the launch of t2s will make securities settlement – including collateral mobilisation – safer and more efficient for market participants and central banks alike. with the migration to t2s, a number of operational barriers which currently exist for cross - border settlement will be removed and operational friction will be reduced, allowing collateral to move more easily from where it is, to where it is needed. t2s will be an important piece in the “ mosaic ” of post - trade settlement. t2s will overcome the technical difficulties encountered today in quickly transferring collateral assets. the common and extended settlement timetables across t2s markets will also support more efficient mobilisation and management of collateral assets and, in this way, t2s is a crucial step to a better functioning financial market, at least from an operational point of view. the eurosystem has also taken initiatives in relation to the services for mobilisation of collateral for its own credit operations. one of the most significant developments in this respect is the introduction of support for cross - border triparty collateral management services which will go - live towards the end of this month. trip

sufficiently large player in the foreign exchange market to affect the exchange rate ; and ( iii ) a microstructure channel – where the central bank has sufficient information about the a few years ago the reserve bank of new zealand considered whether to stop holding reserves. this would have sent a powerful though not totally convincing signal that there would be no intervention, because intervention can also be financed by borrowing. included in ishii et al ( 2006 ) is material on the mechanics of foreign exchange intervention, which can be seen as providing a partial answer to the ieo's concerns that fund staff are not equipped to give practical advice on intervention and other practical exchange rate issues, including how to develop the needed market infrastructure. in any case, it is not entirely clear that the staff should be experts in the nitty - gritty of exchange rate intervention, which is highly country and institution dependent. it is probably better in this area for the fund to help the central bank of the concerned country to obtain technical assistance from a central bank that is or has been in a similar situation. this was attempted in the indonesian program in 1997, but it became clear there that the forces moving the exchange rate were too powerful to be stemmed by intervention alone, however sophisticated it might be. i have avoided using the calvo - reinhart term " fear of floating ", preferring rather to try to explain why countries often intervene. ishii et al ( 2006 ) describe the approach of the mexican authorities, which involved selling options to sell foreign exchange if the exchange rate depreciated to a specified value. this approach may have encouraged the development of hedging instruments by the private sector. operation of the market and the forces active in it to be able to intervene in particular ways or at a particular time such that it can move the rate. in the face of significant capital flows, these channels are unlikely to be able to influence the rate for very long without supportive macroeconomic policy. that is why it has been so hard to find major effects of intervention per se on the exchange rates of the major industrialized countries. however, where capital flows are controlled or the country is not yet well integrated into the global capital markets, and provided policymakers are willing to intervene on a sufficiently large scale, the portfolio balance channel can operate to enable the country to have a sustained effect on the exchange rate, as the chinese and the russian cases illustrate. interventions are not costless. unless they are sterilized they are likely to