De facto, we are already seeing some progress in the integration of financial stability within economic governance through the European Financial Stability Facility and the future setting-up of the European Stability Mechanism. The use of these facilities to provide loans for banking sector recapitalisation reflects the recognition that crisis management for sovereigns and for financial institutions is increasingly intertwined. Perhaps over time this will provide the foundation for a more integrated European system of crisis prevention and management for the public and financial sectors. Ultimately, it is every euro area country’s interest that the collective governance arrangements reflects the reality of economic and financial integration. Following this path of necessary gradual reforms is essential for the efficiency and welfare of the whole euro area. BIS central bankers’ speeches  7
Such perspectives and occasionally voiced doubts about the reliability of pension promises adversely affect consumption and investors' willingness to take risks. Last but not least, the bearish stock markets directly affect the value added by our financial sector, which contributes over 10 percent to GDP. Risk management In Switzerland and abroad, banks have adopted a more cautious attitude. International institutions, in particular, manage their credit risks much more actively than they used to. They sell some of these risks to other financial intermediaries, including insurance companies and institutional asset managers. The available data do not allow any reliable conclusions to be drawn as to the risk distribution after the credit risk transfers. It can be concluded, though, that credit risks are borne by a larger number of market players than previously and that diversification possibilities are probably better utilised nowadays. In interbank business, too, more attention is being paid worldwide to default risks. A growing share of interbank business is hedged; this is also the case in Switzerland, where repo business has developed steadily. Unhedged transactions still clearly account for the bulk of interbank business, but with an average volume of approximately Sfr 20 billion, interbank repos, which were neglected for a long time,  BIS Review 73/2002  3  have grown to a respectable size. With respect to system stability, this development is favourable and should be further promoted. Continuous Linked Settlement (CLS) As regards credit risks in foreign exchange business, the launch of the CLS system this autumn is a milestone achievement.