##gis of the ecb, is responsible for the daily implementation of monetary policy in its country, as regards open market operations, standing facilities and minimum reserves. however, as i mentioned previously, some important work remains to be done before we can consider that the euro financial markets are fully integrated and that they contribute in the most efficient way to the best allocation of resources. • at the juncture between the bond and the money markets, the repo market still lacks homogeneity and harmonization. this situation derives from the complex nature of this market, in which legal and settlement issues play a prominent role. the differences in domestic legislation can prove detrimental to the development of an homogeneous repo market on a euro - wide basis and to the adoption of common market standards. as such, this issue needs to be addressed. indeed, a lot of work has been conducted on this issue by market participants - and i know that isma has been a driving force in this regard - as well as by the public authorities at the european level. to a large extent, it should find its way into the directive on collateral that the european commission is about to propose to facilitate the cross - border collateralisation technique. • as regards more specifically securities markets, the cross - border circulation and settlement of securities needs to be further enhanced. one can expect the consolidation process that is taking place among securities settlement systems ( ssss ) to improve eventually the ability of market participants to move securities efficiently at lower costs across the euro zone. • similar remarks can be made regarding stock markets. confronted with fierce competition coming from new entrants, our traditional stock exchanges are implementing major changes. the introduction of the euro has been a catalyst which added another strong incentive for the rationalization of all the existing market structures. these tremendous changes, perhaps we could even call them a revolution, have been sped up by the never ending improvements in technology. indeed, the technology revolution is transforming not only the architecture of stock markets, but also the organization of bond markets. it impacts the way intermediaries and investors conduct their business. the outcome of the changes brought about by these developments are not yet well known. this is why they certainly need to be closely monitored, not only within individual firms but also at the level of supervisory bodies. • at a moment when all activities are tending to accelerate and render location issues more acute, changes in the regulatory environment are crucial to fostering efficient financial markets. let me mention in particular the ucits ( mutual

a long time the main interest of central banks in payment systems came from computer experts. payment systems used to be viewed merely as ‘ computers ’ that cleared and settled payment obligations. in the late 1980s the focus started to shift towards the financial risks, i. e. credit and liquidity risk inherent in payment systems. slowly it became common knowledge that payment systems could be a source of systemic risk by providing a channel through which the failure of one participant to meet its payment obligations could be passed on to other participants. in their own best interest and under the influence of the overseers operators started to protect their systems against financial risks - in most cases by building real - time gross settlement systems ( rtgs ). today almost every country is operating an rtgs system. there is now a widespread consensus within the private sector and the central banking community about the kind of operational requirements and financial risk controls that are necessary to make a payment system safe. a main contributor in this area has been the committee on payment and settlement systems ( cpss ) at the bank for international settlements ( bis ). as a standard - setting body the cpss has, for instance, drafted the core principles for systemically important payments systems. the core principles are a testimony of the consensus about standards for safety and efficiency in payment systems. the cpss has also played a leading role in raising the awareness of the risks involved in the settlement of foreign exchange transactions. it has also followed and to some extent promoted the cls project since its beginning. the safety of the clearing and settlement infrastructure has been a long - standing concern of the overseers. together with the financial industry they might even have enjoyed some pride while looking at what was achieved in terms of efficiency as well as safety and soundness of operations by the industry. but clearly, since september 11, 2001, a new awareness of vulnerability has grown on us all. those tragic events have made us rethink our approach vis - a - vis safety and operational risk. i think we all suddenly realized we had to reassess the vulnerability of our institutions and systems and, where necessary, improve their resilience. vulnerability - a quick survey ensuring that companies, consumers and investors have confidence in their ability to effect transactions and access their funds, securities, and other financial assets is of the highest importance in times of crisis. therefore it is clearly in the private and public interest to ensure that, in the event of any large - scale disruption, systemic consequences are minimized. however