##ed to the united states, which, in lowering financial constraints, amplified the current account deficit of this country. one may actually wonder whether this also partly contributed to the development of a financial bubble in the united states. the key idea i would like to take from this literature is that finance most certainly played a key role in the emergence of global imbalances. how and why may the g20 roadmap help financial soundness and global rebalancing as the global economy is recovering from the crisis, the g20 roadmap aims first at ensuring the transition to a strong, sustainable and balanced growth. by “ strong ”, we mean that growth should converge to the growth rate of potential output over the medium term whereas that potential is enhanced by the implementation of more effective structural policies. “ sustainable ” growth should be consistent with public finance sustainability, price and financial stability, along with social and environmental policy goals. finally, “ balanced ” growth implies a growth that is broadly based across all g20 countries and all regions in the world, and as i said earlier, that should not generate persistent and destabilizing internal or external imbalances. “ balanced ” growth also implies to facilitate the catching up of developing countries ( and the taking off of the poorest ). drawing the lessons from the crisis, growth cannot be strong without being sustainable and cannot be sustainable if it is not balanced. the so - called “ framework for strong, sustainable and balanced growth ” is the key mechanism by which g20 countries work together to achieve these objectives. with support from the imf, g20 countries are going through a mutual assessment process by sharing their policy frameworks, programs and projections and assessing their consistency with the common objectives. this process will lead the g20 to recommend policy options to its members. policy options obviously depend on national circumstances. countries facing serious fiscal challenges need in particular to accelerate the pace of fiscal consolidation, while countries that have the capacity should expand domestic sources of growth and help cushion a decline in demand from other countries. reforms of social safety nets will be essential in both cases and structural reforms of the product and labor markets will be key to foster stronger growth in the medium and long run. policy options may also entail exchange rate adjustments consistent with smooth rebalancing. in search of global financial safety nets there is another side to rebalancing where finance matters. starting with the asian crisis of 1997 – 1998 and up until the global shortage of liquidity that took

assets are to be included in the equation. the establishment of a strong single deposit guarantee scheme, and not least a credible single resolution mechanism with bail - in for failing banks, is essential if the eu is to succeed in containing the negative contagion from banks to governments in a future banking union. in denmark we already have a credible resolution mechanism, and we have retained our aaa rating throughout the crisis. both have served us well. all the same, it cannot be ruled out that denmark ’ s independent resolution approach has increased the banks ’ funding costs in the short term, so it is important to establish a single european framework for resolution of banks. the danish banking sector is characterised by substantial cross - border activities among the largest banks. the consolidated assets of danish banks amount to almost four times denmark ’ s gdp. in addition, the ratio of the largest danish bank's consolidated assets to gdp is among the highest in the eu. due to the size of the banking sector and the high degree of concentration, a single european insurance scheme, as provided for by a banking union, will, other things being equal, be attractive from a danish point of view. after all, insurance schemes work best when many equal policyholders share the burden. * * * overall, i believe that it would be an advantage for denmark to participate in the banking union once the remaining two legs – the deposit guarantee scheme and the resolution mechanism – are in place. therefore it is important to remain firmly seated at the negotiation table and contribute to ensuring a robust and effective set - up which denmark may join if we choose to do so. if a credible framework is established for a banking union, and tax payers will not have to foot the bill when banks fail in the future, this will have a stabilising effect, not only within the euro area but also in other member states. as i see it, that is in itself a strong argument in favour of danish participation in a banking union. thank you for your attention. bis central bankers ’ speeches