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.
The benefits of price stability, which are also important factors to the attainment of MDGs are: effective planning; lower investment costs; increased public and foreign investor confidence in the economy; improved external sector competitiveness; and accelerated economic growth needed to reduce poverty levels. (a)  Effective planning  When prices are stable, corporate institutions, governments, civil society and individuals are able to draw up their expenditure plans well into the future. In particular, companies will be  BIS Review 123/2007  1  able to reliably plan with some degree of certainty for their operations and long-term investment in fixed assets that will expand their production capacity and output and lead to increased employment as well as enhancement of incomes. Similarly, a government is able to make more accurate projections of revenues expected to be collected in future and thus more effectively plan its current and capital expenditures that are likely to benefit the poor. (b)  Lower cost of investment  Interest rates being the cost of funds will inhibit borrowing for investment if they are too high. Interest rates, therefore, are an important factor in attaining price stability. Low and stable interest rates, which are possible with the achievement of low inflation, create conducive credit conditions that improve accessibility and availability of credit to the productive sectors. Improved access to credit by the private sector will result in increased investment and production which ultimately leads to higher economic growth and improvement in standard of living.