through to qualitative market intelligence ( mi ). we complement the views of external market contact base with the views of our own specialist experts among bank staff [ 12 ]. the bank ’ s focus is primarily around those financial markets closest to our mission. the backdrop to the latest events is that financial markets globally have been volatile in recent months, with increases in government bond yields and falls in risky asset prices. while largely orderly in most markets, pressures were observed in parts of the financial system, including challenging liquidity conditions across some markets. this has naturally put us, along with other central banks and supervisors on alert for further signs of strain and the attendant risks of dysfunction. uk financial assets saw significant repricing since the start of this week, particularly affecting long - dated uk government debt. were dysfunction in this market to continue or worsen, there would be a material risk to uk financial stability. this would lead to an unwarranted tightening of financing conditions and a reduction of the flow of credit to the real economy. on 28 september, yesterday, the bank ’ s financial policy committee, which i ’ m a member of, noted the risks to uk financial stability from dysfunction in the gilt market. it recommended that action be taken and welcomed the bank ’ s plans for temporary and targeted purchases in the gilt market on financial stability grounds at an urgent pace. these operations have started, with the first one carried out yesterday afternoon. these purchases will be strictly time limited until 14 october. they are intended to tackle a specific problem in the long - dated government bond market. the purchases will be unwound in a smooth and orderly fashion once risks to market functioning are judged to have subsided. the bank ’ s mi function has informed these actions by providing the bank ’ s policy committees with detailed, real - time information on market functionality and tradeability. having an extensive and established, regular and on - going, in - depth mi relationship – not only with the community of banks operating in the london markets, but also with the end users of government bonds and wider uk rates markets asset managers, pension funds and liabilities managers – enabled us to get clear understanding of the pressures that were building in real time. conclusion i started my remarks today by talking about how things have changed since the start of the pandemic and i finished them by focussing on events this week. i hope the bank ’ s perspective on why we use real - time data and how they contribute to how we

of these, the ecb - cfs research network on " capital markets and financial integration in europe " has the closest ties to the theme of this year's conference – the transformation of the european financial system. some of you may have attended the initial workshop here in frankfurt last april. it's a european initiative ; future workshops are to be held at the bank of finland in helsinki, in march next year, and at the bank of greece next november. also related to the present theme is the eurosystem monetary transmission mechanism network. why have we chosen the transformation of the european financial system as our subject on this occasion? the establishment of economic and monetary union ( emu ), almost four years ago, and the introduction of the euro banknotes and coins were real milestones. in respect of the maastricht treaty, they appear to mark the completion of the process of monetary integration in europe. but we shouldn't regard monetary union as an end in itself. the introduction of the euro will have – and already has had – a powerful influence on the development of financial markets in europe and their integration, as we will learn and discuss today. the implications of these developments are manifold and profound, in particular for central bankers, but also for other policy - makers. let me mention a few examples. first and foremost, the transformation of the financial system has an impact on the conduct of monetary policy. for example, the emergence of new financial instruments and changes in the use of existing ones affect the choice, behaviour and interpretation of forward - looking financial indicators of underlying economic variables, such as consumer price inflation and gdp growth. moreover, the implications for the transmission mechanism of monetary policy are of supreme importance to the ecb. but i'll say no more on this matter now, as my colleague otmar issing will cover it in greater depth in his dinner speech this evening. second, financial system transformation affects the implementation of monetary policy. i will give you an example. our weekly main refinancing operations with money market counterparties are conducted on the basis of repurchase agreements ( " repos " ). this requires a list of eligible collateral for such operations. in a changing financial environment, a central bank has to ensure that eligible collateral allows market participants to have efficient and equal access to central bank liquidity. my third example of the importance of financial system transformation to central banks relates to the payment systems function. most central banks in industrialised countries run a