flows to emerging markets, resulting from the highly accommodative monetary policies in advanced economies and the prospective exit from highly accommodative monetary policies. and we exchanged views on the policy responses in emerging markets. in our discussions on the lessons from the euro area crisis we recognised the different approaches to regional integration in asia and the euro area, for example, as regards objectives and the underlying institutions of cooperation and decision - making. a key lesson from our crisis is that institutions must take into account the degree of regional integration. in the euro area, we have made big advances in strengthening the institutional framework of our economic and monetary union – with the banking union being the most important one. we have also seen significant progress as stressed countries have adjusted their policies at the national level. but there is no room for complacency. policy efforts both at the national and the european level need to be sustained. we also exchanged views on the need for bis central bankers ’ speeches regional financial safety nets when regional financial integration is high. both regions have mechanisms in place, namely the european stability mechanism and the chiang mai initiative multilateralization, although they differ in terms of design and instruments. bis central bankers ’ speeches

in the sense of how natural and sustainable, the low level of housing construction actually is. after all, it seems rather remarkable that the rising prices in the housing market have not stimulated supply more. if construction had reacted in what might seem a more natural way and followed prices and demand better, the increase in prices would have been less dramatic. part of the explanation is probably that we had some excess production of housing during the economic boom, that led to the crisis in the early 1990s. but this is not enough to explain why so little has been built in the past fifteen years. there appears to be some form of obstacle or sluggishness that has held back construction. it is important that we analyse what this is and, if possible, try to remedy it. i would like to point out that i do not believe that the solution is to try to stimulate massive housing construction. one problem in many countries was that there was a boom in the housing market, not just with regard to demand for housing, but also supply, where excessive resources were attracted to the housing sector. the large supply – the overcapacity that was built up – probably meant that the fall was much greater once demand declined and housing prices began to fall. but here in sweden developments have rather been the opposite. construction has not been excessively high ; if anything it has been excessively low. the challenge in the coming period will be to try to get the supply of housing in a better long - term balance with demand without transitional problems, for instance in the form of overly rapid price falls, being too great. these questions are not easy ones. they are also beyond the domain of monetary policy and cannot be managed very well through better supervision and regulations in the financial bis central bankers ’ speeches sector. but they are nevertheless part of the overall picture, and i think it is important that they are discussed. bis central bankers ’ speeches