##ability of labour markets and increasing competition in the markets for goods and services, will also enhance the effectiveness of monetary policy in maintaining price stability and minimise output volatility in response to adverse price shocks. the need to proceed with structural reforms fully applies to european financial integration. financial markets that are not yet fully integrated have a potential to increase economic growth which must be exploited. for example, a study estimates the potential resulting from the integration of european bond and equity markets in terms of additional gdp growth at around 1 % over a ten - year period, or approximately eur 100 billion. 2 moreover, the 311 million people in the euro area, or, more generally, the 459 million citizens of the european union, expect europe to deliver such economic benefits. as a central banker, i am very conscious of the fact that the implementation of structural reforms which increase the economic potential of the euro area also facilitates the conduct of monetary policy. to summarise, enhanced european financial integration increases the potential for greater and more sustained non - inflationary economic growth. i now turn to the links between financial integration and financial stability. the task of contributing to the safeguarding of financial stability is provided for in the treaty establishing the european community. the ecb provides the outcome of its monitoring of euro area - wide financial stability in its financial stability review that is made available to the public. our latest report was published just one week ago. 3 let me first make some general remarks about the task to assess the stability of the financial system. although, like it is the case for monetary policy assessment, there is not yet a widely accepted, rigorous framework that summarises developments in financial stability in a single quantitative measure, many of the financial stability assessments that are undertaken by a growing number of central banks around the world are based on a broad and forward - looking notion of financial stability. 4 financial stability is often seen from the perspective of the avoidance of financial crises, but it has a larger dimension. financial system stability requires the financial system ’ s principal components – financial markets, the related market infrastructures, and financial institutions – to be jointly capable of london economics ( 2002 ), “ quantification of the macro - economic impact of integration of eu financial markets ”, report to the european commission. the december 2005 ecb financial stability review, published on 8 december 2005, is available from the ecb ’ s website at http : / / www. ecb. int / pub / pdf / other / financial

to continue to work very actively on all of its work streams regarding the regulation of the non - banking sector. this includes regulatory reform of money market funds, securitisation and the interaction with the banking sector. i am looking forward to the progress report to be delivered for the g20 meeting in october. further regulatory challenges in a number of key domains, decisions have been taken by the international community. it is no time to challenge them. it is time to implement. in a crisis period where confidence is of the essence, it would be extremely damaging if the authorities were to hesitate, demonstrate an absence of resolve and of the fortitude that is required by the circumstances. i see resistance of some in the financial sector against basel iii. i see similar messages on the sifis. for me, it is crystal clear : what has been decided is decided. but there are other areas of regulatory reform where work is still underway. let me briefly highlight two key areas on which we need to stay committed and where swift progress is of the essence. first, there is the review of the markets in financial instrument directive ( mifid ), on which a proposal is expected to be released by the european commission this autumn, will represent a key step in the right direction. amending the mifid should enable the eu regulatory framework to keep pace with financial innovation while responding to the g20 commitments to deal with less regulated and more opaque parts of the financial system. second, it is key that transparency is enhanced across the board : with regard to markets, institutions and products. lack of information contributes to the mispricing of risks, mistrust among market participants can turn situations into downturns. in order to build confidence and contribute towards the stability of markets it is important that financial innovation and technological advances contribute to the ability of financial markets to sustainably provide financial services to the real economy. we need to establish a harmonised framework that enables coordinated action, increases transparency and reduces the risks posed by these market practices. moreover, we need to better identify, monitor and assess the potential threat to market stability posed by high frequency trading. the iosco consultation on regulatory issues raised by the impact of technological changes on market integrity, carried out in response to a g20 leaders request during the seoul summit in 2010, recalls that “ the benefits from technological advances should not bis central bankers ’ speeches overshadow the risks that these innovations pose to the efficiency and integrity of markets. these changes raise issues