low as three basis points in early 1999 and has since decreased to between one and two basis point. this success has been sustained in particular by the high degree of integration of the largevalue payment systems and our target system. the launch of our new single technical platform, london economics ( 2002 ), “ quantification of the macroeconomic impact of integration of eu financial markets ”, report to the european commission. see “ the role of financial markets and innovation for productivity and growth in europe ”, ecb occasional paper no 55, forthcoming. see the bis quarterly review, march 2007, table 21b. the data underlying the, at present, 42 indicators are published and updated twice per year on the ecb ’ s website. see at http : / / www. ecb. int / stats / finint / html / index. en. html. target2, in november this year will promote further financial integration, in particular through a harmonised service level, a single price structure, and a harmonised set of cash settlement services. it is, however, also a fact that the euro area short - term debt securities market has witnessed only a limited degree of cross - border activity. this may partly be due to the fact that short - term debt securities issued by euro area residents have very similar risk characteristics and therefore offer little scope for international diversification. our respective indicator, which gives the share of short - term debt securities issued by euro area residents and held by other euro area residents, shows a rising trend – from 7 % in 2001 to over 12 % in 2005 – but the absolute numbers are small when compared to the corresponding indicators for the bond and equity market. with respect to the absolute size of the short - term debt securities market, i would like to emphasise the short - term european paper ( step ) initiative. the step initiative promotes the development of a pan - european short - term paper market through market players ’ voluntary compliance with a core set of standards encompassed in the step market convention, which was signed in june 2006. by the end of march this year, 35 step - compliant programmes, amounting to €201 billion, had been launched under the step label. the ecb regularly produces statistics on yields and volumes in the step market and publishes them on its website. 7 with respect to bond markets, euro area cross - border holdings of long - term debt securities have increased strongly – from about 10 % at the end of the 1990s to nearly 60 % in

. this work has been strongly supported by the eurosystem, notably via the escb banking supervision committee ’ s annual report on eu banking sector stability and the biannual ecb financial stability review of the euro area financial system. with regard to crisis management, the adoption of the memoranda of understanding on cooperation between central banks, banking supervisors and, more recently, ministries of finance, has been a major accomplishment. work to carry out simulation exercises to test these arrangements is already underway. iii. alternative approaches while the progress achieved is widely acknowledged, some market participants have nevertheless called for a more integrated institutional approach, particularly in the area of banking supervision. specifically, the introduction of a “ lead supervisor ” for cross - border banking groups has been proposed. this lead supervisor would not only be responsible for the prudential supervision of all group entities during normal times, but would also coordinate and take the final decision on possible emergency and crisis management measures concerning the group. while the panel discussion this afternoon will offer us the opportunity to debate the possibility of a more integrated supervisory framework in detail, i would like to share with you at this stage some thoughts on this matter. the development of european financial markets is manifestly a highly dynamic process. the supervision and management of this process requires close monitoring and careful analysis of the current trends. it also requires all responsible authorities to assess, on an ongoing basis, whether the existing institutional arrangements remain appropriate and whether they are likely to cope well with future challenges. keeping an open mind certainly complements our attitude of considering with caution some of the ideas that call for fundamental institutional changes. several reasons underlie our position. first, we consider that the arrangements for supervisory cooperation have been considerably enhanced by the strengthened legal framework for supervisory cooperation and the introduction of the lamfalussy approach. if fully exploited by all stakeholders, the new arrangements, by promoting supervisory convergence and cooperation, should enable us to effectively address the financial stability challenges lying ahead. the present institutional set - up should therefore be given adequate time to show its effectiveness before alternatives are considered. second, any fundamental revisions of the existing supervisory arrangements which challenged the basic principle of national responsibility and accountability would have a number of political, legal and practical implications. moreover, such changes would affect not only banking supervision, but also other public policies safeguarding financial stability, notably crisis management and deposit insurance. in order to deal with these complex matters effectively, it would be necessary to analyse all these aspects very carefully so as to