Against this background, it needs to be stressed that monetary policy in an enlarged euro area would not – and could not - include, as an own objective, the promotion of the catching up process of any participating country. Notwithstanding that catching up is desirable, it is our conviction that the best contribution the ECB can make to enhancing the growth prospects of current and new participants in the single currency area is to guarantee stable prices. Moreover, it should also be realised that the entry of new Member States into the euro area will neither lead the ECB to redefine the scope for monetary policy, which is the formulation of a monetary policy for the euro area as a whole. If individual countries are faced with an asymmetric economic development, national economic policies should be used to tackle the problems that might be the result of such an asymmetric development. Concluding remarks I should like to close my presentation here. Yet, before concluding my remarks, let me stress that we at the ECB, as well as at the Eurosystem level at large, are fully aware of the magnitude of the political, economic and institutional challenges faced by accession countries along the road towards the adoption of the euro.
To evaluate that, you need an effective TCA tool that goes beyond measuring just the observed spread to include market impact, price variation, hold times and fill ratios, and can give you guidance pre-trade, as well as post-trade analysis. TCA is already well established in equity markets, reflecting amongst other things the European regulatory obligation to show best execution under MIFID II. But FX poses different challenges. There is no MIFID obligation for most spot FX business. And effective data are harder to come by, given the lack of market-wide pre- or post-trade transparency. TCA data sourced exclusively from one liquidity provider are unlikely to provide an objective evaluation. Platforms typically only give access to their post-trade data to active users. And very large shares of FX turnover are internalised by the large liquidity providers. So it’s hardly surprising that less than two-thirds of European FX desks use any form of TCA16 – and only a fraction of this (according to our market intelligence) involves picking trading strategies, using genuinely independent data. It remains to be seen whether independent third-party TCA providers can develop business models in FX that are both sustainable economically but also robust enough in terms of their quality and breadth of data inputs to drive widespread adoption. Establishing common standards for effective TCA, and sharing post-trade data anonymously, are areas where the buyside can usefully collaborate.