jurgen stark : the agenda for the competitiveness of europe ’ s economy and financial system speech by mr jurgen stark, member of the executive board of the european central bank, at ambrosetti finance workshop, cernobbio, italy, 5 april 2008. * * * ladies and gentlemen, i wish to thank the organisers of this event ( ambrosetti ) for their invitation, which allows me to speak about the competitiveness of the euro area – a topic which has even become more of a prime concern in many advanced countries in view of the increasing challenges resulting from globalisation. given the varied facets of “ competitiveness ” – that i broadly define as “ the ability of an economy to compete in international markets ” – i would like to start by reviewing some specific aspects of economic and financial performance of the euro area. i would continue thereafter with some aspects regarding the performance of the euro area banking sector, including the link between financial development and the transmission of monetary policy. finally, with a view to reforms which aim at improving further the performance of the euro area economy and financial system, i will draw some lessons from the recent financial turmoil. real and financial aspects of euro area competitiveness starting by an assessment of the competitiveness of euro area firms and thus their capacity to play a leading role in world markets, losses in world export market shares over the last decade point to increasing challenges for the euro area. while being partly an adjustment to the emergence of new competitors, and most notably china and india, with lower labour costs, this may in principle also reflect losses in price competitiveness against other advanced competitors or a more unfavourable export specialisation. nevertheless, it is important to note that most other advanced competitors have also experienced export market share losses over the same period. on a more positive note, recent analyses of highly disaggregated data, at the product and variety level, further show that instead european firms have gained market shares in the high - price and high - quality segment of mature sectors. 1 however, important differences remain with regard to the export performance across individual euro area countries. unfavourable price and cost developments thereby often seem to have been a major cause of a weaker export performance. contrarily, the relatively stronger export performance of germany appears, to a large extent, be due to very moderate increases in labour costs. other factors such as differences in the export specialisation – the product range and product quality – and the geographical orientation certainly have also played a role

6 4 / 12 / 2019 progress on benchmark reform | speeches | rba one issue that has been generating quite a bit of angst in the region is the impact of the european union's benchmarks regulation ( bmr ). under the bmr, eu supervised entities – including banks and ccps ( central counterparties ) – can only use benchmarks that are registered in the eu. to achieve this status, benchmarks administered outside the eu would need to be in a jurisdiction with a legal framework judged by the eu to be ‘ equivalent ’ to the bmr, or would need to substantially comply with the bmr. the eu had set a deadline of 1 january 2020, but has recently announced a two year extension. [ 13 ] this is a welcome development, and provides administrators in the region with valuable additional time to comply with the requirements of the bmr. in addition, the eu has recently issued draft decisions recognising the australian and singaporean regulatory regimes as equivalent to the bmr. this means that benchmarks such as bbsw and sor can continue to be used in the eu after 1 january 2022. conclusion there are three main points i would like to leave you with concerning interest - rate benchmarks. first, the end of libor is approaching. market participants should continue preparing for this by transitioning to alternative risk - free rates. second, it is prudent for users of all benchmarks to have robust fall - back provisions in their contracts, not just those referencing libor. isda's work on fall - backs is progressing well, and we encourage all users of interest - rate benchmarks to adopt isda's fall - backs once they are finalised. third, most jurisdictions in the asia - pacific region have chosen to strengthen their credit - based benchmarks. this includes australia, where bbsw remains robust. credit - based benchmarks can coexist alongside risk - free rates when they are supported by liquid underlying markets. users can then choose the benchmark that is most appropriate for their circumstances. endnotes [ * ] i would like to thank ellis connolly for all his work in this area. see bailey a ( 2017 ), ‘ the future of libor ’, speech at bloomberg london, 27 july. available at : < https : / / www. fca. org. uk / news / speeches / the - future - of - libor >. i have talked about