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Research on dialectal varieties was for a long time concentrated on phonetic aspects of language. While there was a lot of work done on segmental aspects, suprasegmentals remained unexploited until the last few years, despite the fact that prosody was remarked as a salient aspect of dialectal variants by linguists and by naive speakers. Actual research on dialectal prosody in the German speaking area often deals with discourse analytic methods, correlating intonations curves with communicative functions (P. Auer et al. 2000, P. Gilles & R. Schrambke 2000, R. Kehrein & S. Rabanus 2001). The project I present here has another focus. It looks at general prosodic aspects, abstracted from actual situations. These global structures are modelled and integrated in a speech synthesis system. Today, mostly intonation is being investigated. However, rhythm, the temporal organisation of speech, is not a core of actual research on prosody. But there is evidence that temporal organisation is one of the main structuring elements of speech (B. Zellner 1998, B. Zellner Keller 2002). Following this approach developed for speech synthesis, I will present the modelling of the timing of two Swiss German dialects (Bernese and Zurich dialect) that are considered quite different on the prosodic level. These models are part of the project on the "development of basic knowledge for research on Swiss German prosody by means of speech synthesis modelling" founded by the Swiss National Science Foundation.
We present a new self-contained and rigorous proof of the smoothness of invariant fiber bundles for dynamic equations on measure chains or time scales. Here, an invariant fiber bundle is the generalization of an invariant manifold to the nonautonomous case. Our main result generalizes the “Hadamard-Perron theorem” to the time-dependent, infinite-dimensional, noninvertible, and parameter-dependent case, where the linear part is not necessarily hyperbolic with variable growth rates. As a key feature, our proof works without using complicated technical tools.
It is shown that between one-turn pushdown automata (1-turn PDAs) and deterministic finite automata (DFAs) there will be savings concerning the size of description not bounded by any recursive function, so-called non-recursive tradeoffs. Considering the number of turns of the stack height as a consumable resource of PDAs, we can show the existence of non-recursive trade-offs between PDAs performing k+ 1 turns and k turns for k >= 1. Furthermore, non-recursive trade-offs are shown between arbitrary PDAs and PDAs which perform only a finite number of turns. Finally, several decidability questions are shown to be undecidable and not semidecidable.
0. Introduction 1. Observations concerning the structure of morphosyntactically marked focus constructions 1.1 First observation: SF vs. NSF asymmetry 1.2 Second observation: NSF-NAR parallelism 1.3 Affirmative ex-situ focus constructions (SF, NSF), and narrative clauses (NAR) 2. Grammaticalization 2.1 Cleft hypothesis 2.2 Movement hypothesis 2.3 Narrative hypothesis 2.3.1 Back- or Foregrounding? 2.3.2 Converse directionality of FM and conjunction 3. Language specific analysis 4. Conclusionary remarks References
In hindsight, the debate about presupposition following Frege’s discovery that the referential function of names and definite descriptions depended on the fulfillment of an existence and a uniqueness condition was curiously limited for a very long time. On the one hand, it was only in the 1960s that linguists began to take an interest and showed that presupposition was an allpervasive phenomenon far beyond this philosophers’ pet definite descriptions. And on the other hand, and this is our real concern, it is now only too obvious that the uniqueness condition is too restrictive to be applicable to the general case. An utterance of “The cat is on the mat” should not imply that there is only one cat and one mat in the whole world. The obvious move is to limit the uniqueness condition to some notion of utterance context.
In the following study we present the results of three acoustic experiments with native speakers of German and Polish which support implications (a) and (b). In our experiments we measured the friction phase after the /t d/ release before the onset of the following high front vocoid for four speakers of German and Polish. We found that the friction phase for /tj/ was significantly longer than that of /ti/, and that the friction phase of /t/ in the assibilation context is significantly longer than that of /d/.
The paper explores factors that influence the design of financing contracts between venture capital investors and European venture capital funds. 122 Private Placement Memoranda and 46 Partnership Agreements are investigated in respect to the use of covenant restrictions and compensation schemes. The analysis focuses on the impact of two key factors: the reputation of VC-funds and changes in the overall demand for venture capital services. We find that established funds are more severely restricted by contractual covenants. This contradicts the conventional wisdom which assumes that established market participants care more about their reputation, have less incentive to behave opportunistically and therefore need less covenant restrictions. We also find that managers of established funds are more often obliged to invest own capital alongside with investors money. We interpret this as evidence that established funds have actually less reason to care about their reputation as compared to young funds. One reason for this surprising result could be that managers of established VC funds are older and closer to retirement and therefore put less weight on the effects of their actions on future business opportunities. We also explore the effects of venture capital supply on contract design. Gompers and Lerner (1996) show that VC-funds in the US are able to reduce the number of restrictive covenants in years with high supply of venture capital and interpret this as a result of increased bargaining power by VC-funds. We do not find similar evidence for Europe. Instead, we find that VC-funds receive less base compensation and higher performance related compensation in years with strong capital inflows into the VC industry. This may be interpreted as a signal of overconfidence: Strong investor demand seems to coincide with overoptimistic expectations by fund managers which make them willing to accept higher powered incentive schemes. JEL: G32 Keywords: Venture Capital, Contracting, Limited Partnership, Funds, Principal Agent, Compensation, Covenants, Reputation, Bargaining Power
On embedded implicatures
(2004)
The Gricean approach explains implicatures by assumptions about the pragmatics of entire utterances. The phenomenon of embedded implicatures remains a challenge for this approach since in such cases apparently implicatures contribute to the truth-conditional content of constituents smaller than utterances. In this paper, I investigate three areas where embedded implicatures seem to differ from implicatures at the utterance level: optionality, epistemic status, and implicated presuppositions. I conclude that the differences between the two kinds of implicatures justify an approach that maintains Gricean assumptions at the utterance level, and assumes a special operator for embedded implicatures.
Quantificational determiners in Japanese can be marked with genitive case. Current analyses (for example by Watanabe, Natural Language and Linguistic Theory, to appear) treat the genetive case marker in these cases as semantically vacuous, but we show that it has semantic effects. We propose a new analysis as reverse partitives. Following Jackendoff (MIT-Press, 1977), we assume that partitives always contain two NPs one of which is phonologically deleted. We claim that, while in normal partitives the higher noun is deleted, in reverse partitives the lower noun is deleted.
"A team", definitely
(2004)
In morphological systems of the agglutinative type we sometimes encounter a nearly perfect one-to-one relation between form and function. Turkish inflectional morphology is, of course, the standard textbook example. Things seem to be quite different in systems of the flexive type. Declension in Contemporary Standard Russian (henceforth Russian, for short) may be cited as a typical example: We find, among other things, cumulative markers, “synonymous” endings (e.g., dative singular noun forms in -i, -e, or -u), and “homonymous” endings (e.g., -i, genitive, dative, and prepositional singular). True, some endings are more of an agglutinative nature, being bound to a specific case-number combination and applying across declensions, e.g., -am (dative plural, all nouns); and some cross the boundaries of word classes, e.g., -o, which serves as the nominative/accusative singular ending of neuter forms of pronouns (and adjectives) and as the nominative/accusative singular ending of (most) neuter nouns as well. Still, many observers have been struck by the impression that what we face here are rather uneconomic or even, so to speak, unnatural structures. But perhaps flexive systems are not as complicated as they seem. What seems to be uneconomic complexity may be, at least partially, an artifact of uneconomic descriptions.
A remarkable indictment and conviction following the sale of an ‘obscene’ comic book invites us to examine arguments brought forth to describe a specifically childlike reception of new media, as usually suggested by those who would motivate legal restrictions for such media. Trying to explain some perceived contradictions on the surface of these arguments, we discuss whether it is the failure or rather the extreme success of texts that is marked as ‘dangerous’ in such contexts.
All the works in Mazuna lexicography have a common denominator: they are translation dictionaries biased towards French and were compiled by Catholic and Protestant missionaries or colonial administrators. These dictionaries have both strong and weak points. The macrostructure although it does not display features of sophistication, i.e. the use of niching and nesting procedures, tends to survey the full lexicon of the language which make these dictionaries real reservoirs of knowledge. The microstructure contains a lot of useful entries. However, no metalexicographic discussion is provided in the user's guide to make it accessible to the target reader. There are also some shortcomings especially in the areas of suprasegmental phonology (absence of tonal indications) and orthography.
The Melusines that appear in Fontane’s texts [...] must be read as part of history of citations and refigurations, a history that then revives and flourishes in diluted form around the turn of the century with the trivial myth of the femme fatale. The new context for Fontane’s Melusine is the social construction of the feminine in the context of the conflict over the equality and/or the difference of the sexes, and the currency of certain clichéd versions of this construction. [...] In this essay, I will examine the function that the Melusine figure — as the recasting and rewriting of a myth — assumes in realist texts and, specifically, in the texts of Fontane.
Maintenance of genomic integrity is essential to avoid cellular transformation, neoplasia, or cell death. DNA synthesis, mitosis, and cytokinesis are important cellular processes required for cell division and the maintenance of cellular homeostasis; they are governed by many extra- and intra-cellular stimuli. Progression of normal cell division depends on cyclin interaction with cyclin-dependent kinases (Cdk) and the degradation of cyclins before chromosomal segregation through ubiquitination. Multiple checkpoints exist and are conserved in the cell cycle in higher eukaryotes to ensure that if one fails, others will take care of genomic integrity and cell survival. Many genes act as either positive or negative regulators of checkpoint function through different kinase cascades, delaying cell cycle progression to repair the DNA lesions and breaks, and assuring equal segregation of chromosomes to daughter cells. Understanding the checkpoint pathways and genes involved in the cellular response to DNA damage and cell division events in normal and cancer cells, provides information about cancer predisposition, and suggests design of small molecules and other strategies for cancer therapy. Key Words: ATM-ATR; ATM/ATR; Aurora kinases; BRCAl; Cdc6; Cdc25; Cdc27-Cdc20/CdhI; Cell cycle; CENP-E; centrosome; checkpoint; Chkl/Chk2; cyc1in-Cdk; cyclindependent kinase inhibitors (CKI); hATRIP; Mad/Bub; MCM; MgcRacGAP; microtubule-associated proteins (MAPs); mitotic exit network (MEN); Mpsl; NIMA kinases; ORC; p53; PCNA; PBK-Akt; Plk; Rad50-Nbsl-Mrell; Ran-GTP; Ras; RB-E2F; SMC; Teml.
When the concept of the auteur was coined in the 1950s and 1960s, it was an initiative to clarify the obscure matters of authorship in cinema. Because a film must necessarily be a collective work, understood as the result of a large number of creative contributions, it was often unclear who the decisive power behind a certain film was, who contributed the "distinctive quality". The control will usually belong to the director, the producer or the star (or all three in combination), but what singles out a given film could also come from the cinematographer, the scriptwriter, from the author of an adapted literary work, or from traditions in the studio or in the genre. Nothing can be taken for granted about a film's authorship, it can only be decided through a thorough analysis of each film's production process, an analysis that, in most cases, will be impossible to make. ...
Japanese wh-questions always exhibit focus intonation (FI). Furthermore, the domain of FI exhibits a correspondence to the wh-scope. I propose that this phonology-semantics correspondence is a result of the cyclic computation of FI, which is explained under the notion of Multiple Spell-Out in the recent Minimalist framework. The proposed analysis makes two predictions: (1) embedding of an FI into another is possible; (2) (overt) movement of a wh-phrase to a phase edge position causes a mismatch between FI and wh-scope. Both predictions are tested experimentally, and shown to be borne out.
We argue that there is a crucial difference between determiner and adverbial quantification. Following Herburger [2000] and von Fintel [1994], we assume that determiner quantifiers quantify over individuals and adverbial quantifiers over eventualities. While it is usually assumed that the semantics of sentences with determiner quantifiers and those with adverbial quantifiers basically come out the same, we will show by way of new data that quantification over events is more restricted than quantification over individuals. This is because eventualities in contrast to individuals have to be located in time which is done using contextual information according to a pragmatic resolution strategy. If the contextual information and the tense information given in the respective sentence contradict each other, the sentence is uninterpretable. We conclude that this is the reason why in these cases adverbial quantification, i.e. quantification over eventualities, is impossible whereas quantification over individuals is fine.
Results of a production experiment on the placement of sentence accent in German are reported. The hypothesis that German fulfills some of the most widely accepted rules of accent assignment— predicting focus domain integration—was only partly confirmed. Adjacency between argument and verb induces a single accent on the argument, as recognized in the literature, but interruption of this sequence by a modifier often induces remodeling of the accent pattern with a single accent on the modifier. The verb is rarely stressed. All models based on linear alignment or adjacency between elements belonging to a single accent domain fail to account for this result. A cyclic analysis of prosodic domain formation is proposed in an optimality-theoretic framework that can explain the accent pattern.
In this paper we review the current state of research on the issue of discourse structure (DS) / information structure (IS) interface. This field has received a lot of attention from discourse semanticists and pragmatists, and has made substantial progress in recent years. In this paper we summarize the relevant studies. In addition, we look at the issue of DS/ISinteraction at a different level—that of phonetics. It is known that both information structure and discourse structure can be realized prosodically, but the issue of phonetic interaction between the prosodic devices they employ has hardly ever been discussed in this context. We think that a proper consideration of this aspect of DS/IS-interaction would enrich our understanding of the phenomenon, and hence we formulate some related research-programmatic positions.
This paper investigates the nature of the attraction of XPs to clauseinitial position in German (and other languages). It argues that there are two different types of preposing. First, an XP can move when it is attracted by an EPP-like feature of Comp. Comp can, however, also attract elements that bear the formal marker of some semantic or pragmatic (information theoretic) function. This second type of movement is driven by the attraction of a formal property of the moved element. It has often been misanalysed as “operator” movement in the past.
In this paper, we discuss the design and implementation of our first version of the database "ANNIS" (ANNotation of Information Structure). For research based on empirical data, ANNIS provides a uniform environment for storing this data together with its linguistic annotations. A central database promotes standardized annotation, which facilitates interpretation and comparison of the data. ANNIS is used through a standard web browser and offers tier-based visualization of data and annotations, as well as search facilities that allow for cross-level and cross-sentential queries. The paper motivates the design of the system, characterizes its user interface, and provides an initial technical evaluation of ANNIS with respect to data size and query processing.
This paper is concerned with the tagging of spatial expressions in German newspaper articles, assigning a meaning to the expression and classifying the usages of the spatial expression and linking the derived referent to an event description. In our system, we implemented the activation of concepts in a very simple fashion, a concept is activated once (with a cost depending on the item that activated it) and is left activated thereafter. As an example, a city also activates the nodes for the region and the country it is part of, so that cities from one country are chosen over cities from different countries. A test corpus of 12 German newspaper articles was tested regarding several disambiguation strategies. Disambiguation was carried out via a beam search to find an approximately cost-optimal solution for the conflict set of potential grounding candidates for the tagged spatial expression. Test showed that the disambiguation strategies improved accuracy significantly.
Davidsonian event semantics has an impressive track record as a framework for natural language analysis. In recent years it has become popular to assume that not only action verbs but predicates of all sorts have an additional event argument. Yet, this hypothesis is not without controversy in particular wrt the particularly challenging case of statives. Maienborn (2003a, 2004) argues that there is a need for distinguishing two kinds of states. While verbs such as sit, stand, sleep refer to eventualities in the sense of Davidson (= Davidsonian states), the states denoted by such stative verbs like know, weigh,and own, as well as any combination of copula plus predicate are of a different ontological type (= Kimian states). Against this background, the present study assesses the two main arguments that have been raised in favour of a Davidsonian approach for statives. These are the combination with certain manner adverbials and Parsons (2000) so-called time travel argument. It will be argued that the manner data which, at first sight, seem to provide evidence for a Davidsonian approach to statives are better analysed as non-compositional reinterpretations triggered by the lack of a regular Davidsonian event argument. As for Parsons´s time travel argument, it turns out that the original version does not supply the kind of support for the Davidsonian approach that Parsons supposed. However, properly adapted, the time travel argument may provide additional evidence for the need of reifying the denotatum of statives, as suggested by the assumption of Kimian states.
A pragmatic explanation of the stage level/individual level contrast in combination with locatives
(2004)
One important difference between stage level predicates (SLPs) and individual level predicates (ILPs) is their behavior with respect to locative modifiers. It is commonly assumed that SLPs but not ILPs combine with locatives. The present study argues against a semantic account for this behavior (as advanced by e.g. Kratzer 1995, Chierchia 1995) and proposes a genuinely pragmatic explanation of the observed stage level/individual level contrast instead. The proposal is spelled out using Blutners (1998, 2000) optimality theoretic version of the Gricean maxims. Building on the observation that the respective locatives are not event-related but frame-setting modifiers, the preference for main predicates that express temporary properties is explained as a side-effect of “synchronizing” the main predicate with the locative frame in the course of finding an optimal interpretation. By emphasizing the division of labor between grammar and pragmatics, the proposed solution takes a considerable load off of semantics.
The purpose of this paper is to describe the TüBa-D/Z treebank of written German and to compare it to the independently developed TIGER treebank (Brants et al., 2002). Both treebanks, TIGER and TüBa-D/Z, use an annotation framework that is based on phrase structure grammar and that is enhanced by a level of predicate-argument structure. The comparison between the annotation schemes of the two treebanks focuses on the different treatments of free word order and discontinuous constituents in German as well as on differences in phrase-internal annotation.
The purpose of this paper is to describe recent developments in the morphological, syntactic, and semantic annotation of the TüBa-D/Z treebank of German. The TüBa-D/Z annotation scheme is derived from the Verbmobil treebank of spoken German [4, 10], but has been extended along various dimensions to accommodate the characteristics of written texts. TüBa-D/Z uses as its data source the "die tageszeitung" (taz) newspaper corpus. The Verbmobil treebank annotation scheme distinguishes four levels of syntactic constituency: the lexical level, the phrasal level, the level of topological fields, and the clausal level. The primary ordering principle of a clause is the inventory of topological fields, which characterize the word order regularities among different clause types of German, and which are widely accepted among descriptive linguists of German [3, 6]. The TüBa-D/Z annotation relies on a context-free backbone (i.e. proper trees without crossing branches) of phrase structure combined with edge labels that specify the grammatical function of the phrase in question. The syntactic annotation scheme of the TüBa-D/Z is described in more detail in [12, 11]. TüBa-D/Z currently comprises approximately 15 000 sentences, with approximately 7 000 sentences being in the correction phase. The latter will be released along with an updated version of the existing treebank before the end of this year. The treebank is available in an XML format, in the NEGRA export format [1] and in the Penn treebank bracketing format. The XML format contains all types of information as described above, the NEGRA export format contains all sentenceinternal information while the Penn treebank format includes only those layers of information that can be expressed as pure tree structures. Over the course of the last year, more fine grained linguistic annotations have been added along the following dimensions: 1. the basic Stuttgart-Tübingen tagset, STTS, [9] labels have been enriched by relevant features of inflectional morphology, 2. named entity information has been encoded as part of the syntactic annotation, and 3. a set of anaphoric and coreference relations has been added to link referentially dependent noun phrases. In the following sections, we will describe each of these innovations in turn and will demonstrate how the additional annotations can be incorporated into one comprehensive annotation scheme.
Transforming constituent-based annotation into dependency-based annotation has been shown to work for different treebanks and annotation schemes (e.g. Lin (1995) has transformed the Penn treebank, and Kübler and Telljohann (2002) the Tübinger Baumbank des Deutschen (TüBa-D/Z)). These ventures are usually triggered by the conflict between theory-neutral annotation, that targets most needs of a wider audience, and theory-specific annotation, that provides more fine-grained information for a smaller audience. As a compromise, it has been pointed out that treebanks can be designed to support more than one theory from the start (Nivre, 2003). We argue that information can also be added to an existing annotation scheme so that it supports additional theory-specific annotations. We also argue that such a transformation is useful for improving and extending the original annotation scheme with respect to both ambiguous annotation and annotation errors. We show this by analysing problems that arise when generating dependency information from the constituent-based TüBa-D/Z.
This paper reports on the SYN-RA (SYNtax-based Reference Annotation) project, an on-going project of annotating German newspaper texts with referential relations. The project has developed an inventory of anaphoric and coreference relations for German in the context of a unified, XML-based annotation scheme for combining morphological, syntactic, semantic, and anaphoric information. The paper discusses how this unified annotation scheme relates to other formats currently discussed in the literature, in particular the annotation graph model of Bird and Liberman (2001) and the pie-in-thesky scheme for semantic annotation.
Tree-local MCTAG with shared nodes : an analysis of word order variation in German and Korean
(2004)
Tree Adjoining Grammars (TAG) are known not to be powerful enough to deal with scrambling in free word order languages. The TAG-variants proposed so far in order to account for scrambling are not entirely satisfying. Therefore, an alternative extension of TAG is introduced based on the notion of node sharing. Considering data from German and Korean, it is shown that this TAG-extension can adequately analyse scrambling data, also in combination with extraposition and topicalization.
This paper sets up a framework for LTAG (Lexicalized Tree Adjoining Grammar) semantics that brings together ideas from different recent approaches addressing some shortcomings of TAG semantics based on the derivation tree. Within this framework, several sample analyses are proposed, and it is shown that the framework allows to analyze data that have been claimed to be problematic for derivation tree based LTAG semantics approaches.
LTAG semantics for questions
(2004)
This papers presents a compositional semantic analysis of interrogatives clauses in LTAG (Lexicalized Tree Adjoining Grammar) that captures the scopal properties of wh- and nonwh-quantificational elements. It is shown that the present approach derives the correct semantics for examples claimed to be problematic for LTAG semantic approaches based on the derivation tree. The paper further provides an LTAG semantics for embedded interrogatives.
In April 2002 the European Central Bank (ECB) and the Center for Financial Studies (CFS) launched the ECB-CFS Research Network to promote research on “Capital Markets and Financial Integration in Europe”. The ECB-CFS research network aims at stimulating top-level and policy-relevant research, significantly contributing to the understanding of the current and future structure and integration of the financial system in Europe and its international linkages with the United States and Japan. This report summarises the work done under the network after two years. Over time the network formed a coherent and growing group of researchers interested in the integration of European financial markets, while using light organisational structures and budgets. The members of this evolving group met repeatedly at the events organised by the network to present the latest results of their research and to share views on policy options. In this sense, the “network of people” intended at the start was created. Overall, the network aroused great interest, as leading academic researchers, researchers from the main policy institutions and high-level policy makers participated actively in it by presenting research results, through speeches and in policy panels. It also stimulated a new research field on securities settlement systems, an area of high policy relevance and interest to the ECB that had not attracted much interest in the research community beforehand. Also, the network seems to have triggered several related outside initiatives by international institutions, such as the IMF or the OECD. During its first two years the network was organised around three workshops and a final symposium on 10-11 May 2004. To focus research resources and to ensure medium-term policy relevance, a limited number of areas have been given top priority: bank competition and the geographical scope of banking; international portfolio choices and asset market linkages between Europe, the United States and Japan; European bond markets; European securities settlement systems; and the emergence and evolution of new markets in Europe (in particular start-up financing markets). In order to stimulate further research focused on the priority fields of the network, the ECB Lamfalussy research fellowships were established. These fellowships sponsor projects proposed by young researchers, both a dvanced doctoral students and younger professors. Five Lamfalussy fellowships were granted in 2003 and five more in 2004. The first papers from this program have already been issued in the ECB working paper series or are forthcoming. One of them won the prize for the best paper written by a Ph.D. student at the 2004 European Finance Association Meetings in Maastricht. Results of the network in the five top priority areas can be summarised as follows: Bank competition and the geographical scope of banking. First, integration does not appear to be very advanced in many retail banking markets. Second, some of the inherent characteristics of traditional loan and deposit business constrain the cross-border expansion of commercial banking, even in a common currency area. Hence, the implementation of some policies to foster cross-border integration in retail banking may be ineffective. Third, theoretical research suggests that supervisory structures may not be neutral towards further European banking integration. Finally, a stronger role of area-wide competition policies could be beneficial for further banking integration. This would also stimulate economic growth, as more competition in the banking sector induces financially dependent firms to grow more. European bond markets. While the government bond market has integrated rapidly with the EMU convergence process, its full integration has not yet been achieved. The introduction of a common electronic trading platform reduced transaction costs substantially, but yield spreads of long-term sovereign bonds of the euro area are still heterogeneous. This is largely explained by different sensitivities to an international risk factor, whereas liquidity differentials only play a role in conjunction with this latter factor. Somewhat surprisingly in this context, the dynamically developing corporate bond market exhibits a relatively high level of integration. There is also increasing evidence that the introduction of the euro has contributed to a reduction in the cost of capital in the euro area, in particular through the reduction of corporate bond underwriting fees. As a result, firms may wish to increase bond financing relative to equity financing. The development of a larger corporate bond market is also important for monetary policy. For example, US evidence suggests that the rating of corporate bonds may contribute to the persistence of recessions, as rating agencies´ policies affect firms asymmetrically in their access to the bond market over the business cycle. US evidence also suggests that liquidity conditions in stock and bond markets tend to be positively correlated. European securities settlement systems. European securities settlement infrastructures are highly fragmented and further integration and/or consolidation would exploit economies of scale that could greatly benefit investors. It is not clear, however, whether direct public intervention in favour of consolidation would lead to the highest level of efficiency, for example because of the existence of strong vertical integration between trading and securities platforms (“silos”). In contrast, promoting open access to clearing and settlement systems could lead to consolidation and the highest level of efficiency. Finally, regarding concerns about unfair practices by Central Securities Depositories (CSDs) toward custodian banks, regulatory interventions favouring custodian banks should be discouraged, as long as CSDs are not allowed to price discriminate between custodian banks and investor banks. The emergence and evolution of new markets in Europe (in particular start-up financing markets). While fairly well integrated, “new markets” and start-up financing are less developed and integrated in Europe than in the United States. However, new markets and venture capitalists are the most important intermediaries for the financing of projects with high risk but with potentially very high return. The analysis carried out within the network reveals that European start-up financiers are mostly institutional investors, while US venture capitalists are mostly rich individuals. Also, new markets are essential for the development of start-up finance in Europe, as they provide an exit strategy for start-up financiers who can then sell new successful projects using initial public offerings. Finally, the legal framework affects the development of venture capital firms. For example, very strict personal bankruptcy laws constrain early stage entrepreneurs, reducing demand for venture capital finance. International portfolio choices and asset market linkages between Europe, the United States and Japan. At a global scale, asset market linkages have increased recently. For example, major economies such as the United States and the euro area have become more financially interdependent. This phenomenon can be observed in stock and bond markets as well as in money markets, where the main direction of spillovers has recently been from the US to the euro area. Country-specific shocks now play a smaller role in explaining stock return variations of firms whose sales are internationally diversified. Increases in firmby-firm market linkages are a global phenomenon, but they are stronger within the euro area than in the rest of the world. Various other phenomena also increase market linkages and therefore the likelihood that financial shocks spread across countries. One example is the use of global bonds. Finally, the nowadays more direct access of unsophisticated investors to financial markets may increase volatility. Other areas. Financial integration affects financial structures, but it does not need to lead to their convergence across countries. Financial structures matter for growth, as market-oriented financial systems benefit all sectors and firms, whereas bank-based systems primarily benefit younger firms that depend on external finance. Moreover, good corporate governance increases firms’ value. In particular, the dual board system, where the monitoring and advising roles of the board of directors are separated, is found to dominate the single board structure. Therefore, the further development of the European single market should strongly require good corporate governance. In general, well designed institutions foster entrepreneurial activity, partly by relaxing capital constraints. The results of the network clearly illustrated the substantial effects the introduction of the euro had on euro area financial markets. In addition to the effects on bond markets, stock markets and the cost of capital summarised above, research produced showed that the single currency had its strongest effects on money markets, whose unsecured segment is now completely integrated. Without any doubt the euro generally enhanced the liquidity and efficiency of euro area financial markets, and ongoing initiatives such as the European Union’s Financial Services Action Plan will help to continue this process. In sum, in the first two years the network has established itself as the hub for the research debate on European financial integration. Some of the best papers produced by the network, leading to the conclusions mentioned above, are currently being considered for publication in two special issues of academic journals. An issue of the Oxford Review of Economic Policy on “European financial integration” is published contemporaneously with this report, and an issue of the Review of Finance is planned for next year. The current policy context, the gradual progress of integration as well as the creation of other related non-ECB or non-CFS initiatives on financial integration suggest that this topic will remain high on the agendas of policy makers and academics for the years to come. Therefore, the ECB Executive Board and the CFS decided to continue the network, refocusing its priorities. Three priority areas have been added: 1) The relationship between financial integration and financial stability, 2) EU accession, financial development and financial integration, and 3) financial system modernisation and economic growth in Europe. These three areas have become particularly important at the current juncture, but have not received particularly strong attention in the first two years of the network. For example, the area of financial stability research was highlighted by the ECB research evaluators as an area deserving further development. Moreover, despite the results found in the first two years of the network, new developments remain to be further explored in the earlier priority areas. A three-year extension is envisaged, running from after the May 2004 symposium until 2007, with two events to be held per year. The threeyear period is long enough to consider the first effects of the Financial Services Action Plan. It also constitutes a realistic horizon for the ambitious agenda implied by the three new priorities. The generally light organisational structure and working of the network will not be changed. In addition, given the value of the Lamfalussy fellowship research program in inducing further research in the areas of the network, the program has also been extended for all the research topics in the area of the network.