maybe a less costly option than it intuitively appears? since it will play a greater role in any of the remaining, realistic scenarios, how can we best administer this – that is to say, what should we expect to be ring - fenced in both jurisdictions, and what shouldn ’ t? you see, this remains an open - ended process. the key takeaways are that two sovereign regulatory jurisdictions will emerge, that free cross - border trade in financial services will be rather limited, and that the remaining options all require further analysis and thought. no matter which direction we take, our decisions will have an indirect, albeit substantial impact on other third countries to the eu. but how? let ’ s take a look at this second question of my talk. 5. will brexit alter relations with other third countries? and, naturally, i will focus on the us case. brexit could affect two avenues which give financial firms access to the eu market : namely, decisions of supervisory equivalence, and the licensing process. let ’ s take a look at each one in turn. a new equivalence framework could be more systematic. yet its precise calibration still remains to be seen. again, one example can be found in the world of ccps. the eu is currently revising the european market infrastructure regulation, or emir for short. the consensus in the council of ministers and the commission clearly points in one particular direction, which is to move away from a quite flexible, outcome - driven equivalence approach to one where emir requirements have to be met more precisely by foreign ccps. to give you just two examples, eu supervisors4 would have clearer compliance expectations and would review an equivalence decision at more regular intervals. ultimately, where equivalence cannot be achieved this could lead to an entity being required to relocate to the eu. for third - country ccps, this enhanced equivalence is attractive, as it makes the decision more predictable and transparent, whilst ensuring the possibility of providing clearing services across borders without the need to operate a fully licensed subsidiary. but where us ccps are concerned, this approach may not be appropriate or necessary ; because we already have a robust equivalence decision. given the thorough process of mutual assessment that we carried out, there is a case for sustaining this outcome – for example, through a bilateral us - eu agreement on ccp equivalence. it is important that authorities on both sides of the atlantic enter into pragmatic dialogue. one important question, however, remains unsolved, namely

outlook and rising interest rates in the eurozone. the movement of the external value of the euro can be viewed with relative composure from the standpoint of a european central banker. since the euro became the single currency of 11 european countries, foreign trade between those countries has been conducted without any exchange risk or exchange - rate fluctuations. in other words, only foreign trade with non - eu countries is affected by exchange - rate movements ; hence the “ openness ” of the euro - area countries, i. e. their vulnerability to exchange - rate fluctuations, has decreased significantly. iv what, then, have been the repercussions of the launch of the euro on the european financial markets? figure 7 degree of integration of the european money market unsecured money market : completely integrated secured money market : making distinct progress towards integration, but certain deficits remain - highly liquid - divergent legal systems - with substantial transaction volumes - large proportion of “ big player ” trade nowadays cross - border - cross - border settlement of securities transactions sometimes poses problems - cross - border payments settled smoothly by the target system to begin with, a few words on the european money market, i. e. the direct field of operations of the ecb. as far as the unsecured money market is concerned, it has long been fair to speak of a single european market. in this sector, a highly liquid market with a tight bid - ask spread and considerable transaction volumes evolved very quickly. a large part of the trade between “ big players ” is meanwhile being transacted with counterparties abroad ; this trend is undoubtedly being fostered by the smooth functioning of the european payment system, target. distinct progress towards integration has likewise been made in the secured money market. even so, there are still certain shortcomings here. particular problems are posed by the coexistence of different legal systems, as reflected, for instance, in divergent master agreements. to cite an example, alongside the psa / isma master repo agreement customary for international transactions, there are a number of national framework agreements, e. g. for germany or france. finally, there is also a degree of friction in connection with the cross - border settlement of securities, as a result of which particular securities are being traded only in their domestic markets. in general, however, all those concerned are faring satisfactorily as far as the european repo market is concerned : for instance, the european banking association is in the