with differences across countries based on their initial degree of flexibility ( chart 1 ). 3 as a result, we now face a situation of significant divergence in unemployment across the euro area ( chart 2 ). this has direct implications for price stability : slow adjustment has contributed to the protracted disinflation we have witnessed since 2011 and to making inflation expectations more fragile. but it is also directly relevant for the ecb through its effect on the integrity of the currency. like any political union, the cohesion of the euro area depends on the fact that each country is permanently better off within the union than without. convergence is therefore essential to bind the union together, while permanent divergence caused by structural heterogeneity has the opposite effect. for this reason, that every national economy is sufficiently flexible should be accepted as a part of our common dna. it has to be a permanent economic feature that comes with participation in the euro area, in the same way that the copenhagen criteria are permanent political features of membership of the eu. and this is why, as i have said many times, i believe there is a strong case for governance of structural reforms to be exercised jointly at the euro area level : to help each country to achieve the necessary level of resilience ; and to ensure that they maintain that resilience permanently. 4 since structural reforms in any euro area country are a legitimate interest of the whole union, there needs to be stronger ownership of reforms not just at the national level, but at the european level as well. several countries have however made significant progress with structural reforms during the crisis, and we can already see how this has altered the relationship between inflation and unemployment. various estimates of the euro area phillips curve show that, while the slope has varied over time, it has steepened in recent years. in particular, there is evidence that inflation has become increasingly responsive to cyclical conditions in countries that have reformed their product and labour markets, such as spain 5 and italy 6. raising potential growth besides this issue of resilience, as the central bank of the euro area we also have another, equally direct interest in structural reforms. this is related to their effect on growth – or more specifically, the challenges posed by a period of low potential growth. international institutions currently estimate potential growth to be below 1 % in the euro area, compared with above 2 % in the us ( chart 3 ). 7 this is in part a result of the effects of the crisis on investment and

the chinese language. the platform would also ensure that users would feel comfortable with providing intelligence on cyber attacks without compromising proprietary information. needless to say, access to the platform will be through secure channels with robust encryption and on a need - to - know basis. way forward 10. ladies and gentlemen, having announced the launch of the cfi, the hkma will move full steam ahead in collaboration with our partners and the stakeholders to roll out the programmes i just mentioned with the following timeline : bis central bankers ’ speeches 11. ( a ) the hkma will issue a formal circular to all banks next week, stating clearly that it is a supervisory requirement for banks to implement the cfi ; ( b ) we will at the same time conduct a three - month consultation with the banking industry on our detailed proposals on the risk - based cyber resilience assessment framework ; ( c ) we will work with the hkib and astri to roll out the first training courses for cybersecurity practitioners by the end of this year ; and ( d ) we will work with the hkab and astri to set up the cyber intelligence sharing platform by the end of this year. i understand that the timeline for rolling out the cfi programmes is very tight. however, if we wish to raise the cybersecurity resilience of our banking system to a level commensurate with hong kong ’ s position as the leading international financial centre in asia, we cannot afford to go slow or lose any time. in a spirit of cooperation to achieve this common goal, the hkma, the banking industry and our partners will work closely together to implement this ambitious but necessary cfi according to plan. in closing, i would like to emphasise that in the physical world, there are very few, if any, of the defences of the strongest forts that ever existed can prove to be totally impenetrable by attackers. that is why i believe that, in the cyber world, by the same token the fortification initiative against cyber attacks that we are pursuing is not going to be a one - off exercise. it will be an ongoing battle or a fact of life that any successful financial centre must contend with and win if we wish to stay ahead of the game. thank you! bis central bankers ’ speeches