an opportunity to have a debate about europe ’ s collective goals ; such a debate is more necessary than ever and goes beyond the economic sphere alone. 3 from the perspective of the economist and of the central banker who has a keen interest in making emu as a whole work better, the crucial question behind the discussion about a fiscal capacity for the euro area is how to maximise its positive effects on the functioning of emu, while at the same time preserving incentives for sound fiscal policy - making and addressing structural weaknesses at the national level. to start with, we should all be able to agree that the objective of the fiscal capacity should be to make emu more resilient by increasing the capacity for automatic stabilisation in the euro area. the aim should not be to actively fine - tune national economic cycles or to equalise revenues. this is in line with the design principles described in the five presidents ’ report, which notably insists that a fiscal capacity should not entail permanent transfers in one direction. a fiscal capacity in this sense would also be distinct in nature from more allocative tools such as those provided for by the eu budget. to be able to reach this objective, and based on my introductory remarks, i believe we need to see significant further progress along the following three dimensions : first, a pooling of fiscal resources, whatever their nature and size might be, only works if solidarity goes hand in hand with shared responsibility. a move towards more fiscal risksharing in emu would therefore require a commensurate shift towards increased joint decisionmaking within strong common institutions. in any case, access to a joint euro area fiscal capacity should be made conditional on compliance with the fiscal rules of the stability and growth pact. second, we should aim at containing the burden that falls on fiscal policies by strengthening market - based adjustment. as ludwig erhard famously said, we need “ as much market as possible, as much state as needed ”. this means structural reform at the national level. but it also means completing banking union and supplementing it with a comprehensive capital markets union at the european level. in addition, this calls again for completing the single market more broadly, including in the services sector. third, it lies at the very heart of all insurance that risks are distributed equally ex ante. when it comes to mutual insurance against asymmetric shocks, it is clear that fiscal risks do not always stem from fiscal action, but from unsustainable economic and financial policies elsewhere.

the treasury department. we took the opportunity to meet with the newly established toronto chapter of biba, and our high commission in ottawa arranged a reception for potential investors in barbados. as we all know, the largest of our financial institutions operate at a regional level, and therefore as supervisors we need to be concerned about risks that arise from regional linkages. a project for the publication of a regional financial stability report got underway last month. the target for publication of the first regional financial stability report is december 2012. in the meanwhile preparation work on barbados ’ own financial stability report is advanced, and publication is slated for end - december this year. together with our regional partners, barbados has sought to have a voice in the ongoing efforts for reform of the international financial system. we have been invited to join the regional consultative group for the americas, set up by the financial stability board, the body established by the group of 20 countries to oversee the process of international financial reform. shane lowe and i are preparing a paper on caribbean perspectives on international financial reform for presentation at the inaugural meeting of the regional bis central bankers ’ speeches consultative group, on december 2 in mexico city. this year at the time of the annual meetings of the world bank and imf, the caribbean countries were invited to a breakfast meeting with the managing director of the imf to offer our perspective on the fund ’ s work and to share our concerns. this is the second year that we had such a meeting. on the clico matter, we have had very encouraging cooperation with oecs countries through the advisory group which has been established by the judicial managers, and which i co - chair with my friend and colleague timothy antoine, the permanent secretary of finance of grenada. the judicial managers have done an outstanding job in providing a comprehensive menu of options for the resolution of the clico insolvency, from which the option which is in the best interests of policy holders may be chosen. the topics we will cover today are : the impact of the global crisis the role of the fsc financial institutions and the financing of government things that affect credit quality changes in the operation of the fx market ; and considerations for interest rate policy today ’ s sessions are not for decision making ; their value is in the discussion of the issues. if we are to make good policy, we must be fully informed and the issues must be fully ventilated. today we will share information, and there is an opportunity for everyone to contribute their views on the issues presented