go hand in hand. indeed we have witnessed that in a financially integrated market risks can spread and spillover to other segments of the financial market, increasing the likelihood of contagion of financial fragilities and systemic risks. so has this recent experience changed our view about the benefits of financial integration? not at all! it is true that the cause of the financial crisis has many dimensions – which we still need to study carefully. but a key issue has been loose regulation and supervision, opaqueness of financial products and practices, massive mispricing of risk and a distorted allocation of resources. in my view, financial integration remains not only a fact and necessity of today ’ s financial markets, but an irreversible process, a process that we do not wish to reverse. instead, we need a more resilient financial sector! bis central bankers ’ speeches for this, we need financial integration and sound policies guarding our markets. only with appropriate policies, the benefits of financial integration can outweigh its potential risks. first and foremost, we need to strengthen financial market regulation and supervision. and when i say strengthen, i do not only mean stricter rules, greater buffers and better risk management, but also : that regulation and supervision is uniformly applied. that banks ’ business models and corporate governance become sustainable [, internalizing the costs of their risk taking and potential failure ] that financial market activities become more transparent with respect to financial innovations, practices and risk assessments and that the soundness of the system as a whole has to be ensured. more the systemic dimension of financial market actors ’ – but also governments ’ – actions was not sufficiently recognized before the crisis. traditional banking supervision was designed to look at individual institutions ’ risks in isolation. today, we know better. and a lot of progress has been made in this regard. in europe, we have established the european systemic risk board ( esrb ) and three pan european supervisory authorities. and similar institutions were setup across the atlantic in the us. i often hear and i am often asked : is it because we have the euro? we cannot make our common currency responsible for issues caused by market failure, lack of regulation and supervision and undisciplined fiscal expenditure. i am convinced that maintaining price stability is the best contribution a central bank can make for macroeconomic, but also financial stability. however, we also have seen that price stability may be a necessary condition for financial stability but not a sufficient one. moreover, we have seen that

##n to add, i am sporting today. well - being studies suggest these agency and empowerment effects are important for well - being. for example, studies have found that working from home is positively associated with perceived autonomy and this, in turn, has positive spillover effects to our job satisfaction and levels of stress. 19 both boost workplace productivity over the medium term. if home - working is broadly neutral in its impact on our economic contribution, but positive for our welfare, this suggests it is win - win, or at worst draw - win. the covid crisis may inadvertently have fast - forwarded us to a better - way - of - working, perhaps even back - to - a - future where most work takes place in and around the house rather than in an office or factory, as was the case prior to the industrial revolution. i would hesitate before jumping to that conclusion. just as the short - term productivity cost of an abrupt shift to home - working might be overstated, so too might the short - term happiness benefits. in particular, let me discuss two longer - term consequences of the shift to home - working whose effects may not yet be fully visible but which could, over time, detract from both our productivity and our happiness at work. the effects on creativity and relationships these two factors are working relationships ( or what economists sometimes call social capital ) and workplace creativity ( or what economists call intellectual capital ). modern economic theory, and a growing body of empirical evidence, gives both factors a prominent role in explaining why individuals thrive, economies grow and societies succeed. 20 it is well - established that creativity fosters innovation and that in turn fuels economic growth. that was the story of the industrial revolution. what is new is our understanding of how the work environment plays a crucial role in nurturing creativity. 21 for example, the absence of distraction and noise is one important factor fostering creativity. being in “ flow ” requires a degree of cognitive tunnelling. 22 for many people, homeworking provides that quieter, less distracting environment where tunnelling is easier and creativity fostered. gajendran and harrison ( 2007 ). haldane ( 2018a, 2020 ). haldane ( 2018b ). newport ( 2014 ) terms this ‘ tunnelling ’ as deep work and provides a comprehensive overview of the concepts and research. all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice but