follow, but its gains gave rise to imbalances in incomes and in trade. when combined with the economic consequences of the peace, disaster ensued. today, new technologies, the new economy and the new finance have the potential to unlock more sustainable and inclusive growth. consumers can have greater choice and better - targeted services ; small and medium sized businesses can access new credit to grow ; banks themselves can become more productive, and the financial system overall can become more resilient. most fundamentally, unlike in keynes ’ time, the gains from new technologies will not be limited to men or captured by denizens of the city. proudman, j ( 2018 ) cyborg supervision. available https : / / www. bankofengland. co. uk / speech / 2018 / james - proudman - cyborgsupervision. all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx the new finance must be inclusive, allowing everyone to be better connected, better informed and more empowered. by adapting our hard and soft infrastructure, the bank of england will help create the conditions for such innovation to flourish to promote the good of all the people of the united kingdom. all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx

fixed and the banking union completed. otherwise, market participants will continue to fear that local vulnerabilities could eventually spread and destabilise the european banking system before all the firefighting tools are ready to be deployed. the aim must be to move forward swiftly on both risk reduction and risk sharing. risk sharing involves both the public and private sectors, for example by ensuring the same level of deposit protection through a european deposit insurance scheme, but also by continuing to build a capital markets union in europe. the eu and emu also need to face up to their institutional weaknesses. on average, people ’ s trust in both national and eu political institutions is very low. as regards the national level, we know from the economic literature that strong institutions are crucial for sustainable economic growth and governance indicators suggest that there is room for improvement in many member states. as regards the european level, the gap between people ’ s expectations and the eu ’ s institutional setup is widening : • first, the perceived legitimacy of the eu remains low. the eu is not regarded as “ efficient ” and only a minority of citizens feel that their voice counts in the eu. • second, opinion polls suggest that citizens are not opposed to european decisionmaking. specifically, they want the eu to concentrate on their key concerns, notably to protect them better from economic and security risks, and to provide solutions. when responding to these expectations, the eu and emu face however two challenges : • the first has to do with subsidiarity : it should be made clearer where the eu has an advantage over member states in terms of exercising competence and where not. a better demarcation of competences between the european and national level is desirable – but not easy. loose coordination at european level may give the impression that a competence has been passed to the european level, when in fact it continues to be exercised by member states. the result tends to be that the eu gets blamed for apparently seeking to interfere in national affairs when in fact it does not effectively have the power to do so. it should not be so surprising that in such situations the practical result is a lack of coherent action across the eu. this, in my view, means that responsibilities and accountability lines should be more clearly defined and assigned, as europe has done with the single monetary policy and the creation of the european central bank. • the other challenge has to do with intergovernmentalism. the rationale for the intergovernmental approach is to ensure that decisions