##rrencies of the euro. hence, the introduction of the single currency has resulted in more efficient and well - functioning markets, which benefit not only euro area residents, but also market participants outside the euro area. furthermore, this market still has great potential since the use of securities finance by the corporate sector, relative to bank finance, is still only about half that of its counterpart in the united states. the single currency also appears to be a catalyst for restructuring the european corporate sector, and for the emergence of new companies. the ongoing integration process of the national stock exchanges has also been supportive in this respect. primary issues of european equities have reached record highs, with whole new markets, such as the neuer markt in frankfurt, becoming prominent internationally. these developments can only favour those companies which may have found it difficult in the past to finance themselves, but which will now be able to raise equity more easily. in addition, a number of europe - wide equity indices have been established, thereby contributing to extending the trading possibilities and the position - taking opportunities for investors. alliances between stock exchanges should also foster the integration of stock market infrastructures. these changes are bound to intensify competition and make european markets more resilient and fit for the global economy. conclusion to conclude, the introduction of the euro has acted as a catalyst for promoting integration of financial markets in europe, and provides an opportunity to create a europe - wide securities market. the result will be more efficiently functioning markets which, in turn, will mean a reduced cost of capital and improved investment opportunities for businesses and individuals. this process will also enhance the depth and liquidity of financial markets, which in turn will promote stability. the european central bank contributes to this stability by pursuing a credible and transparent monetary policy. in fact, a consistent monetary policy that is committed to price stability is the best contribution that the ecb can make to the smooth functioning and integration of european financial markets. such a policy will be beneficial, as it will minimise the adverse effects of inflation and high inflation uncertainty, thereby creating conditions for steady and sound economic growth in the medium term. a stability - oriented monetary policy thus contributes to the smooth functioning of financial markets and to economic prosperity as a whole.

willem f duisenberg : recent developments and trends in world financial markets speech by dr willem f duisenberg, president of the european central bank, on the occasion of the 75th anniversary of the banco de mexico, mexico, 14 november 2000. * * * introduction i should like to thank the bank of mexico for inviting me to this conference commemorating the bank ’ s 75th anniversary. the theme of this panel discussion is a topical one. in recent years, financial markets have undergone some of the most rapid and extensive changes in any markets. we have witnessed dramatic events in global financial markets, including the asian crisis, the russian crisis, and the near - collapse of long term capital management ( ltcm ), which was a highly leveraged hedge fund with enormous trading positions. more recently, we have seen remarkable developments in stock prices around the world, and in particular in stocks in the telecommunications and internet sectors. many of these so - called “ tech. stocks ”, which experienced sharp price increases in late 1999 and early 2000, have seen their market capitalisation cut substantially in recent months. however, apart from market events such as these, global financial markets have also undergone major structural change in recent years. in particular, the speed and scope of such developments in the euro area following the introduction of the new currency have been remarkable. i should like to concentrate, today, on these structural issues, first of all considering global developments in brief, and then looking at recent developments in the euro area. recent trends in global financial markets perhaps foremost among recent changes in world financial markets has been their accelerating integration and globalisation. this development, which has been fostered by the liberalisation of markets, rapid technological progress and major advances in telecommunications, has created new investment and financing opportunities for businesses and people around the world. easier access to global financial markets for individuals and corporations will lead to a more efficient allocation of capital, which, in turn, will promote economic growth and prosperity. apart from this ongoing integration and globalisation, world financial markets have also recently experienced increased securitisation. in part, this development has been spurred by the surge in mergers and acquisitions and leveraged buy - outs that has taken place in markets of late, not least in the euro area. one aspect of this securitisation process has been the increase in corporate bond issuance, which has also coincided with a diminishing supply of government bonds in many countries, particularly in the united states. other interesting developments in world financial