The main reason is that the single currency has made corporate debt financing more attractive by creating a much larger home-currency investor base than it was the case for any single country of the area before EMU and encouraged international underwriting business for euro-denominated corporate bonds, driving down issuing costs. In 2002, corporate issuance represented about half of the overall bond issuance in the euro area, that is four times more than its share in 1998. In 2002, the gross issuance of eurodenominated bonds accounted for more than a third (38%) of all bond issues (US dollar issues: 47%). Not only have the size of the bond market grown, but also did its liquidity, transparency and standardisation. An increasingly competitive environment, and the development of electronic trading systems, contemporary to the launch of the euro, are among the factors that contributed to these improvements, on the secondary market for government debt initially, and increasingly nowadays on the corporate segment. In that regard, it is worth reminding the success story of the MTS group, an original Italian concept which has translated over a few years into a true pan European electronic platform for fixed-income products with offshoots throughout the continent. Developments witnessed on the short term securities market may appear somewhat uneven and less dynamic. And indeed, efforts remain to be done as regards for instance products characteristics, issuers’ information memoranda settlement practices in order for cross border activity to effectively develop and market integration to gather momentum.
And it helps to lay bare more clearly the underlying growth potential of the economy. BIS central bankers’ speeches  5  The third aspect of the policy response is better financial regulation and supervision. In both the US and UK, the repair of the financial sector was a prerequisite for recovery. Indeed, one of the reasons behind a persistently negative equilibrium real interest rate has been the restricted supply of credit from a damaged banking system. Going forward, financial reforms will help guard against excessive pro-cyclicalities that could emerge in a “low for long” environment. But financial reform is about much more than fixing the failings in advanced economies; it is one of the keys to rebalancing the global economy. The global savings glut will not disappear in the absence of further financial liberalisation in China. That will only proceed if there is a transparent, resilient global financial system worth joining, and will only be completed by further internationalisation of the renminbi. Those realities are key reasons why the Bank of England is so engaged in the work of the Financial Stability Board and has moved to support London as a hub for renminbi clearing. Conclusion For the first time in a long time it seems reasonable to expect the hopes and dreams of the holiday season to be fulfilled. The Ghost of Christmas Present is a cheerful spirit. As uncertainty diminishes, credit conditions improve and balance sheet repair progresses, monetary policy is gaining traction.