A cornerstone for building an integrated single European capital market is the system of accounting standards. For companies to be able to raise capital throughout Europe, and for investors to compare company performance across borders, we need a common reporting language. Some years ago the EU set the course for building an integrated European capital market. We had come to a point where our financial reporting practices no longer met the new requirements for integrated markets. We had to rethink our approach. Finally, we decided to move to International Accounting Standards. That move was bold and visionary.

The changeover to IFRS did not come easy. It took a huge effort from our listed companies, auditors and regulators to adapt to the new accounting environment.

Now, more than two years later we can look back and see how it has gone. A number of studies have been carried out on the first year of IFRS implementation. One of them was issued very recently - that undertaken by the Institute of Chartered Accountants of England and Wales (ICAEW) at the request of the Commission. This study concludes that IFRS implementation has been 'challenging but successful'. Other studies, including the one issued by CESR on the first year of enforcement, convey the same message. Research also shows that the overall quality of accounts and disclosures have improved and that the changeover to IFRS has been achieved without disturbance to the market.

We are currently considering the merits of introducing ISAs in Europe. Before the end of this year, my services will launch a study on the costs and benefits of introducing ISA's as well as any potential differences with US standards. Once we have some results we shall be able to reassess the situation.