advantage would increase. consequently, countries ’ production structures would become less diversified and thus increasingly vulnerable to asymmetric shocks while business cycles could become less synchronised. an opposing view, developed by frankel and rose ( 1997 ), states that european integration would instead lead to greater intra - industry trade integration and more similar economic structures and business cycles through the convergence of factor endowments and technology and reduced exchange rate variability, which tends to weaken intra - industry trade. this view even implies that countries could satisfy the optimum currency area properties ex post rather than ex ante ( the “ endogeneity of oca ” argument ). although the timespan since the start of the emu is too short for any strong empirical conclusions, evidence based on long - term trends of european integration gives some support to both views, leaving it fairly open as to where we might be heading. according to an overview published by the european commission5, there have so far only been modest changes in the pattern of industrial concentration and geographical specialisation within the euro area. while production specialisation has gradually increased since the 1970s, export specialisation appears to have decreased, which could be partly explained by the increased importance of intra - industry trade. similarly, a study of sectoral specialisation carried out by the european system of central banks6 in 2004 found the production structure of euro area countries to be relatively similar, more homogeneous than in the united states, and relatively stable over time. an overall view of the effects of emu on specialisation is consequently still difficult to obtain. a few other developments could shed further light on the issue. a host of studies have highlighted agglomeration or clustering effects, suggesting that in high - value industries, an environment generating positive externalities, such as dense networks of sub - contractors, the presence of competitors and informal links with complementary businesses, the supply of qualified labour and investment capital, the proximity of research capacity and other services, is increasingly important. such agglomeration of production factors could indeed increase specialisation and reduce cross - border trade within industries. at the same time, the growing economic role of services, which are less prone to specialisation and trade, needs to be taken into account. as regards economic efficiency, increased specialisation offers sizeable gains in terms of innovation, productivity and higher potential growth rates. these trends are apparent worldwide, as shown by the fast accumulation of capital and know - how in the new member states and similar developments in asia

thus operationally efficient solutions. they can also serve as the basis for further developments in online and mobile payments. the ultimate aim of sepa is to create a truly domestic european retail payments market which does not differentiate between euro payments made by individuals, businesses or public administrations within one country or between sepa countries. tommaso padoaschioppa, a former member of the ecb ’ s executive board, called this the “ principle of indifference ”. in that sense, sepa is also part of the political objective to create a more integrated europe. the creation of a safe and efficient domestic retail payments market is also an issue of social relevance because individuals and businesses in any country can benefit from retail payment services. it is a means to increase financial inclusion and it strengthens the formal economy. it also has great potential to make remittance payments cheaper and more efficient. let me emphasise : sepa is one of europe ’ s most successful financial integration projects. even during the current financial crisis, sepa has shown its strengths and its implementation has continued without major obstacles. this may be because, as research has shown, effective retail payment services are associated with greater bank stability and because banks perform better in countries with more developed retail payment services. last but not least, there is evidence that retail payments have a positive impact on economic growth. 8 let me conclude by saying that in a world marked by growing mobility and by increasing cross - border trade, retail payments cannot and should not be overlooked. in europe, with its single market for goods, capital, services and a single currency, it is essential to harmonise cashless payments via such a system as sepa. i am convinced that this harmonisation can serve as a valuable point of reference for further integration activities in other parts of the world and also at global level. see the austrian newspaper der standard, 26. 9. 2010, at http : / / derstandard. at / 1285199287021 / westernunion - anti - geldwaesche - regeln - bringen - uns - geschaeft. advisory committee on the future of banks in the netherlands ( “ restoring trust ”, april 2009 ), uk hm treasury ( “ banking reform : delivering stability and supporting a sustainable economy ”, june 2012 ), ecb ( “ retail payments and economic growth ” ; work in progress 2013 ). bis central bankers ’ speeches european retail payment integration should not be seen as a stand