Another important issue is the involvement of finance ministries in the crisis management framework. A High-Level Working Group, comprising representatives from the ministries of finance, central banks and banking supervisors, is working on concrete proposals for cooperation arrangements between the three authorities at EU level. As regards financial stability monitoring, the EU framework has been enhanced considerably in recent years. In this context, I would like to highlight the stability assessment of the EU banking sector, performed by the ESCB’s Banking Supervision Committee, and the comprehensive analysis of potential vulnerabilities in the euro area financial system as a whole, which was carried out as part of the ECB’s Financial Stability Review. In addition, the CEBS is expected to improve its internal exchange of information on individual institutions and groups. 2  BIS Review 18/2005  Markets I now turn to the second component of the financial system, the financial markets. The introduction of the euro and the measures adopted under the FSAP have spurred the integration of the European financial markets. Nevertheless, there continue to be varying degrees of integration. Wholesale money and bond markets tend to be relatively well integrated, but only the unsecured euro money market has reached a fully satisfactory level of integration. The integration of the market of debt securities has been significantly increased, although not yet reaching the level of the United States.
Finally, where appropriate, the ECB can take direct action. I will later give several examples of these different roles. I would like to discuss now the three major components of the financial system, namely the institutions, the markets and the infrastructure. I will address both the wholesale and retail aspects of these three components, and will touch upon developments that can be deemed a success, as well as areas where more effort is required. Institutions Following the adoption of the single currency, the Financial Services Action Plan (FSAP) represented the next major stage in the integration process. Now that the FSAP is nearing completion, I see the post-FSAP period as a “window of opportunity” for further enhancing financial integration. At the same time, I am convinced that further progress is inextricably linked to the improvement of the regulatory and supervisory framework and the financial stability arrangements. In particular, institutional  BIS Review 18/2005  1  arrangements must respond to the need for greater cross-border cooperation, with a view to both supporting further integration and at the same time preserving financial stability. In the area of financial regulation and supervision, a key objective is to achieve a high degree of regulatory and supervisory convergence across countries. This will help reduce the compliance burden on financial institutions, thus addressing one of the largest remaining obstacles to enhanced cross-border activities.