yves mersch : the evolution of the european model of integration speech by mr yves mersch, governor of the central bank of luxembourg, at the amcham ( american chamber of commerce ) financial services committee ’ s networking, luxembourg, 15 february 2005. * * * the year 2005 in europe should be marked by the ratification of the european constitution. this provides an opportunity for trying to assess the quality of european integration over the last 50 years, especially in view of a comment i have recently read in an american newspaper published in europe, which describes this integration process as shaky and unsure. before forming an opinion it is important to recall that the views we might have on our surroundings are deeply influenced by the historical dimension, as well as by the various systems of governance in our different countries and continents. we must not forget that for the united states an overriding event in its history was the civil war ( 1861 – 1865 ), which was followed by well over a century of peace on its own territory. that does not mean that the united states was not involved in wars overseas. but that is very different from having war on your own territory. a second essential element of difference concerns personal or family history. the vast majority of people living in the united states stem from the immigration of economically weak classes or people who were persecuted because of their religion or other ideological beliefs. this has led to a strong feeling of distrust vis - a - vis central government and also to a feeling of strong individualism that is expressed in the national laws and the institutional framework, as well as in the prominence of moral values. europe, on its side, has a quite different pattern of collective and family memories. in order to understand, one has to go back as far as the feudal middle ages, when there were many small states in europe, which tried to gain power or wealth in 2 ways so as to achieve mergers and take - overs with other states : one way was to marry, another was to wage war. the consequence was a permanent state of war on the continent. this led to great poverty and ultimately to revolutions, out of which came a new concept, that of the nation state, which is also familiar to the us, as madame secretary of state so eloquently recalled at iep in paris a week ago. this nation state also meant in many cases the end of feudalism and the transfer of sovereignty through marriage. the policy of acquiring lands through marriage was so successful in the case of the habsburgs that

##ing knowledge, enable people to know each other better, and provide the basis for future cooperation. conclusion to conclude, let me summarise. there are three essential tasks we face in promoting greater integration of islamic financial markets. the first is to encourage greater economic integration and increased cross border flow of trade and investments. economic integration drives financial integration and vice versa. the second task is to foster appropriate legal, regulatory and supervisory frameworks that effectively cater for the specificities of the islamic services providers ; and to work towards greater convergence of rules and practices in islamic finance. this requires greater trust and stronger ties among supervisors. the third is to cultivate stronger people - to - people bonds across all levels, through training, conference and dialogues. there is a saying which is common to the chinese and arabs which goes, “ the journey of a thousand miles begins with one step ”. i am glad to note that a lot of progress has already been made on all the three tasks. however, the journey ahead is long. let us continue to work together towards integrating the islamic financial markets. in this way, we can grow much faster and much more, bringing greater economic benefit to our regions. finally, we are honored to be given the opportunity to host ifsb ’ s 6th annual summit next year, which will be a landmark event for singapore and our islamic finance industry. may i islamic research and training institute. bahrain institute of banking and finance. international centre for education in islamic finance. thank the ifsb council, professor rifaat and the ifsb secretariat. i would like to extend a very warm welcome to you all to singapore.