In the near term, the euro area should continue to benefit from a recovery in exports, the significant macroeconomic stimulus under way and the measures taken so far to restore the functioning of the financial system. In addition, the inventory cycle is expected to contribute positively. However, uncertainty remains high and the persistent volatility in incoming data warrants a cautious interpretation of available information. Overall, the recovery is expected to be rather uneven, given the temporary nature of some of the supporting factors and the ongoing balance sheet correction in the financial and non-financial sectors of the economy, both inside and outside the euro area. This assessment is broadly in line with the September 2009 ECB staff macroeconomic projections for the euro area. According to these projections, average annual real GDP growth will range between -4.4% and -3.8% in 2009 and between -0.5% and +0.9% in 2010. Compared with the June 2009 Eurosystem staff macroeconomic projections, this implies an upward revision of the ranges for both 2009 and 2010, reflecting mainly the recent, more  BIS Review 102/2009  1  positive developments and information. Forecasts by international organisations are broadly in line with the September 2009 ECB staff projections. In the view of the Governing Council, the risks to this outlook remain broadly balanced. On the upside, there may be stronger than anticipated effects stemming from the extensive macroeconomic stimulus being provided and from other policy measures taken.

Through supervisory colleges and crisis management groups, insights and expertise are exchanged across borders. We must finish the job of implementing the post-crisis reforms, hold the line and stick together. Because geofinance will always complicate the supervision of international banks, the high road will never be an easy ride. But we have already seen its benefits in a financial system that can ride out shocks and surprises. Planning for the worst, hoping for the best  Going by recent debates, you could be forgiven for thinking that international banks and insurers have never had to operate across different currencies, legal systems and regulatory frameworks. They have always had to navigate the contours of geofinance. They were perfectly capable of dealing with the introduction of the euro – and the years of uncertainty about whether or not the UK would join. Following the referendum, international banks and insurers have done what they always do with risks they don’t want to carry – they have hedged. The ‘outbounds’ using London as a base for continental operations are planning to beef up their existing EU operations or considering where to establish a new entity. 10  Eight firms as at 31 December 2016 – see http://www.bankofengland.co.uk/pra/Pages/authorisations/designatedfirmslist.aspx. 7  All speeches are available online at www.bankofengland.co.uk/speeches  7  EMBARGO: not for release before 19:30 on Wednesday 4 October 2017  The impact of this first phase of contingency planning on jobs will be relatively modest. Contingency planning is a sliding scale of increased commitment, investment and momentum through time.