This has influenced the integration pattern on the various segments of the financial market. European Union has modified the way in which financial institutions organise their daily business in the euro area: It is true that financial integration in Europe started before January 1999, as banks and non-financial companies included, in their strategies, the setting up of the Single European Market, which occurred ten years ago. The expansion of their operations abroad has been notably the driving force. To illustrate that point, we can look at the stock of foreign assets held by companies. In the case of France, this stock has more than tripled between 1992 and 2000, from EUR bios 131 to EUR bios 465. As a result, non-financial companies gradually introduced more competition into the banking system, as they funded their expansion through non-domestic bond or commercial paper issues, or by centralizing their financing. As an example 40% of the external financial resources borrowed by French medium and large companies are being redistributed to their own subsidiaries, and 10 to 15% 1 consists of commercial paper and bond issuance (figure as at end 2001) . 1  Source : Banque de France – Central balance sheet data -  BIS Review 71/2002  1  1.2  These changes, and on top of them the introduction of the euro, have influenced the integration pattern on the money market, on the bond markets, on the derivatives markets and on the equity markets. Integration is certainly –and naturally– most developed on the money market.
BIS Review 71/2002  7  Nevertheless, there is also general agreement on the fact that the gap, in terms of average GDP per capita, between the accession countries and the euro area, although diminishing, remains still quite significant. The size of the gap, combined recently with a rather limited growth differential between the two groups of countries, suggests that the process of real convergence will be very gradual and will have to continue much beyond the tentative dates for EU accession. Although differences in income levels are not incompatible with EU and even EMU membership, it is extremely important for accession countries to increase real convergence. Indeed, real convergence is essential to create economic cohesion within EMU and promote integration between Members States, thereby helping to minimize the risk and the effects of asymmetric shocks, in the best interest of accession countries themselves. Let me stress seven points of particular relevance for the Eurosystem, and for accession countries themselves on the road towards achieving catching-up and convergence with the EU. •  Firstly, we should never forget that nominal convergence must be sustainable and therefore not only constitutes an objective that must be met at a given point of time but rather a goal that must be achieved continuously. Strict compliance with the Maastricht criteria will be key for joining the euro area.