deficit ) and exerted worldwide pressure on the long end of the yield curve. • second, part of the bubble can be explained by more " structural " factors such as asymmetry in financial development between emerging and developed economies. according to the analysis developed by caballero and others, the world suffers from an " asset shortage ". the supply of liquid and safe financial instruments is insufficient to meet demand, and that supply is asymmetrically distributed across the world. as the us is the primary supplier of liquid and safe assets, it attracts inflows of capital, a process which accentuates global imbalances. excess demand for those assets pushes their prices up, which triggers financial bubbles. financial development in surplus countries would go a long way to solve that problem by reducing the asset shortage, thus the probability of future bubbles. • third, there is no denying that weaknesses and failures in financial markets played a major role in the build up to the crisis. over the last decade, financial innovation has been organized to " transform " illiquid and risky instruments into ( apparently ) safe and liquid assets. that unsustainable process has abruptly come to an end with the burst of the credit bubble. during that period, rating agencies, accounting rules, unregulated and off balance sheet entities as well as very poor risk management all contributed, willingly or unwillingly, to fragilize our financial systems. those weaknesses are at the origin of the crisis. had they been addressed in due time, most of the problems we are now dealing with could have been avoided. creating a new regulatory regime and strengthening our supervisory arrangements are at the forefront of efforts conducted at the national and, for the eu, at the european level. those efforts are closely coordinated worldwide through the g20 process and the newly created financial stability board. central banks'response to the crisis history taught us that banking crises degenerate into deep and lasting depressions unless they are dealt with quickly and forcefully. those lessons were not lost on both fiscal and monetary authorities and the policy response worldwide has, indeed, been exceptional by any historical standard. i would like to focus here on three characteristics of central banks interventions • first, they have been fast and decisive. indeed, the start of the crisis can be dated back to august 9 2007, when the eurosystem provided up to 95 billion euros in exceptional liquidity support to the interbank market. as the crisis developed, those interventions multiplied and evolved, a point

francois villeroy de galhau : productivity - a collective enigma? speech by mr francois villeroy de galhau, governor of the bank of france, at the bank of france - france strategie conference, paris, 1 february 2017. * * * welcome to all of you. it gives me great pleasure to be able to open this conference on french productivity, organised in conjunction with france strategie. the subject is one that is both topical and of great importance to central banks : productivity is one of the principal drivers of growth, and its dynamics are a strong determinant of potential growth, that which is compatible with price stability. as you can see [ slide ], after the major wave of expansion witnessed during les trente glorieuses, which was particularly marked in the case of france, productivity growth in advanced countries has slowed in successive stages since the 1970s. today, it has fallen back to a pace that is historically weak. what are the common factors behind this slowdown in productivity? and is there anything specific to france? i don ’ t believe so : if there is one thing that is specific to france, it is the high level of hourly productivity – one of the highest in the world, alongside that of the united states and germany. so, rather than being a french enigma, the enigma we are looking at this morning seems to me to be more of a collective phenomenon. by way of introduction, i would just like to go back over the three collective hypotheses at the heart of today ’ s debate, before nonetheless going on to examine a few factors that are indeed specific to france. * * * 1. does the problem lie in the measurement of growth? the first theory is that there is in fact no slowdown, as we are not measuring growth properly due to the rise of the digital economy. on 16 january this year, the banque de france held a conference1 that notably discussed this issue in relation to the us economy. the main sources of measurement errors were : first, the estimation of quality - adjusted prices for new technology, as falls in prices tend to be underestimated in us national accounts ; and second, product entry and exit, which makes it difficult to estimate changes in prices over time. this could lead to a significant upward revision to us productivity since 1983 : by 1. 1 percentage points per year at the top end of estimates, according to philippe aghion and his co - authors. nevertheless,