s headquarters no longer stands ; it was demolished sometime after 1959. see library of congress, supra note 4. see elinor ostrom and oliver e. williamson, “ beyond markets and states : polycentric governance of complex economic systems, ” nobel prize lecture delivered at aula magna, stockholm university, stockholm, sweden ( december 8, 2009 ), https : / / www. nobelprize. org / prizes / economicsciences / 2009 / ostrom / lecture /. - 4recognizes mutual and separate interests can do so. with such a configuration, the crossborder financial system can be open, stable, and safe ; without it, the system can become unpredictable and dangerous. “ ring - fencing ” often serves as a catch - all for this dynamic, capturing any and all impediments to the free flow of finance, however and whenever they arise. however, as i have noted previously, that term obscures a distinction that plays a vital role in crossborder finance — between prudently placing a constrained amount of capital and liquidity within jurisdictions and legal entities before a crisis, and competitively seizing capital and liquidity during a crisis. this distinction determines more than just the possibility of an orderly cross - border resolution. pre - positioning of resources — when properly calibrated — can also provide the certainty that lets cross - border finance occur at all. certainty is the critical ingredient in achieving the careful configuration of interests i described. financial institutions need some certainty about the requirements they face by participating in cross - border activity. supervisors need some certainty about safety and soundness, not just of the foreign banks they host, but of their domestic banks operating overseas. creditors and investors need some certainty that a foreign authority won ’ t abrogate their contracts. elected officials need certainty that their constituents are not unfairly disadvantaged. all these parties — and the public — need some certainty that the resources promised to them won ’ t disappear at the first sign of stress. certainty fosters financial stability. it supports clear monitoring and thoughtful planning, by both institutions and their regulators. it signals the clear intention of authorities to cooperate, during normal times and in an emergency. it increases the odds that a cross - border financial institution will keep operating through a crisis. it fosters - 5more and deeper cross - border financial activity, by decreasing its risks and increasing its benefits, both to participants and to the global economy. certainty does require tradeoffs. none of us

wage costs and the high margins seen in certain activities tend, moreover, to make the inflationary episode more persistent, with the adverse consequences this may have for price and cost - formation habits and for the trend of the relative prices and costs that bear on the economy's competitiveness. it is therefore very important not to lose sight of the fact that the main instrument available in the current circumstances is that of making structural reforms that enhance the economy ’ s flexibility, liberalise certain sectors and markets, and increase competition. despite the efforts made in recent decades, there are still numerous areas of the spanish economy that need reforms. i do not intend to address these in detail, but i shall refer briefly to those spheres where i consider pressing action is needed. and i should stress that it is here where the potential room for manoeuvre to counter weakening growth in the euro area is to be found. in the labour market, it is imperative to bring about a milder reduction in employment in cyclical slowdowns. in this connection, we must explore channels which provide a response by wages to changes in the economic environment, aligning them to productivity gains, and avoiding upward inertia in the face of external shocks introduced by mechanisms such as wage indexation clauses. it is also vital to hold long - term unemployment at low levels, and to do this the move from unemployment to employment status must be made easier, improving the workings of employment services and the effectiveness of active policies. in the housing market, the regulations governing renting must be improved to make it more flexible and profitable so as to promote the acquisition of houses for investment purposes, and thus help reduce excess supply. further, putting these houses on the rental market would make it easier to meet the population's demand for residential services. in services activities and, in particular, in the distributive sector there is also much scope to set in place a more competitive environment and achieve sizeable gains in efficiency. i consider that the transposition of the services directive offers a unique opportunity for headway in achieving the objective of reducing our rate of inflation and increasing the economy's competitiveness and household purchasing power in a setting in which incomes have been dented by dearer oil and the slowdown in employment. with the same objectives, improvements in the regulation of the network industries and, in particular, of the energy sector should be made to promote competition and increase energy efficiency. the same applies for port, airport and railway freight