the importance of financial markets in the functioning of the world economy, and the complexity of the channels of interaction between such markets and the real economy. this simple idea has fostered quite a number of initiatives, at the national and international level, to reinforce the resilience and efficiency of financial markets. topics that used to be too technical and tedious, such as accounting and corporate governance, have become exciting and the centrepiece of many reform agendas. let me mention just three issues in this regard : first : financial market integration i believe that one factor which can and should prove fundamental to strengthening the world economy is the integration of international financial markets. the integration of financial markets will promote both competition and transparency and will enhance liquidity. investors will benefit not only from a reduction in transaction costs, but also from an increase in investment opportunities, allowing them to manage risk better. companies, for their part, will find it easier to raise funds to develop their activities. to be sure, in recent years, we have seen impressive advances in the degree of integration of international capital markets. this has fostered a better allocation of saving and improvements in efficiency from which we have all benefited. at the same time, this process has also entailed a more rapid transmission of shocks, whether or not these are generated in financial markets. in the european union, although the process has been given notable momentum thanks to the introduction of the euro and to a series of measures such as the financial services action plan ( fsap ), we are still a long way from achieving fully integrated markets, so that an additional impulse is required. second : accounting harmonisation among all the developments needed to bring about market integration, let me mention one that seems to me particularly important : accounting harmonization or convergence at the international level. financial information is of crucial importance for the proper functioning of the financial system, since it is the basis on which agents make their decisions. retaining their confidence in the reliability, relevance and timeliness of such information is vital. currently, the cross - country comparison of financial information is difficult, since the set of rules under which such information is compiled varies from country to country. moreover, the interpretation of such rules is not always uniform. this is cost - inefficient for those companies having to comply with different accounting regulations because they operate in more than one geographical region. likewise, the lack of comparability may hamper cross - border activity and decision - making by investors. there have

servicer does not properly carry out its primary duty of collecting and appropriately allocating mortgage payments, it can cost homeowners money and, in the most extreme cases, cause a homeowner to be pushed into premature default. some servicers obtain unwarranted or unauthorized fees from borrowers after engaging in unfair collection practices, or through other conduct that causes borrower default, such as misapplied payments, padded costs, erroneous charges, late fees, and so on. too many accounts of shoddy operating procedures – lost paperwork, slow response times, and sloppy recordkeeping – cast a dark shadow on this part of the industry that links mortgage borrowers and lenders. the broad grant of delegated authority that servicers enjoy under pooling and servicing agreements ( psas ), combined with an effective lack of choice on the part of consumers, creates an environment ripe for abuse. moreover, the inability of some servicers to maintain complete and accurate records, and to transfer servicing rights cleanly, causes additional uncertainties and vulnerabilities. the impact of poor business practices can linger on even after the foreclosure sale. in managing foreclosed properties in lenders ’ inventories, servicers may be motivated by timeliness measures in psas to induce the former homeowner or bona fide tenant to vacate before they are legally required to do so, sometimes under the threat of eviction. once the properties are vacant, servicers exercise great discretion in deciding whether or not to repair foreclosed property based on the likelihood that the servicer ’ s advances are recoverable from the sale proceeds. with real estate owned ( reo ) inventories projected to reach one million by the end of 2010, servicer actions will heavily influence the effectiveness of neighborhood stabilization efforts at a time of persistent decline in home values and in fragile markets already weakened by a glut of vacant and abandoned properties, particularly in lowwealth communities. finally, we face a cluster of problems surrounding loan modification. servicers ’ significant concerns about the u. s. treasury ’ s home affordable modification program ( hamp ) are wellknown. that said, we do not know enough about how well servicers are complying with the requirements of that program, or whether all of the hamp modifications that should be made are indeed being made. many servicers, in fact, currently report that the bulk of their loan modifications are being done outside of ham