misguided path. in particular, the significant efforts made in the region over the recent decade to bolster financial sector efficiency and innovation, which in turn promotes financial integration, could be disproportionately curtailed. in addition, it has only been recently that the global attention has also turned to enhancing supervisory intensity and effectiveness as an essential component of the financial reform effort. this is a welcome move and will add a critical dimension to the consideration of future reforms by national authorities. in asia, financial reforms were already accompanied by a significantly strengthened supervisory approach and safety net arrangements, which served to check unfettered innovation and reckless risk - taking behaviours and promote strong incentives for prudent risk management. for these reasons, our banking systems have been resilient through the global financial crisis and have continued to remain strong since, despite continued risks in the global economy. as we contemplate the raft of reforms that will continue to occupy the global agenda in the next few years, our considerations should be to pursue domestic and regional solutions that will deliver a more resilient financial system without impairing the continuous provision of efficient financial services that are vital for our economies. let me conclude my remarks. while many challenges remain, asia is at the cusp of experiencing significant collective economic growth and development. asia should however significantly draw important lessons from the global financial crisis and recognise the implications of greater interdependence. in addition, the sovereign debt crisis in europe relates not only to fiscal matters but to debt management which has significant implications for financial markets. while fiscal issues may remain a national matter, its financing and its broader consequences needs to be addressed. given the positive environment in asia, the opportunity needs to be taken to put in place the necessary arrangements to best address these challenges. the world is increasingly now looking towards asia. with these enabling conditions, asian economies would be better positioned to collectively strive and work towards achieving the shared vision of financial and economic integration that will not only unlock our potential but also enhance the prospects to contribute towards a more balanced and sustainable global economy. bis central bankers ’ speeches

in the euro area and, as jorg has said, expectations there have remained very well anchored. but as in japan, people in europe are talking about a lost decade. cœure : there is a risk of a lost decade in europe, if the right reforms are not undertaken. but the challenges and answers are very different from those in japan. it is true that the crisis has been a step backwards [ a setback ] for the european economy, but the underlying problems, such as declining trend growth and unsustainable social promises, were there before. the crisis has only uncovered them and has shown the need for answers more clearly and more urgently. but the high level of unemployment is certainly worrying … asmussen : yes, the level of unemployment is unacceptable. but the question is what we can do about it. we have a strategy in europe that is based on stable prices, sound fiscal policies bis central bankers ’ speeches and growth and employment - enhancing structural reforms. it will take some time to see the positive effects, but i don ’ t see any viable alternative. cœure : the high level of unemployment, particularly youth unemployment, shows the urgency of taking forward - looking reforms at the national level and, collectively, at the euro area level. with the crisis, differences between countries are becoming clearer and larger. is it a challenge for friendship between european nations? asmussen : we must acknowledge the resurgence of national stereotypes. that is worrying. the cliche that the greek people are lazy, whereas all germans are hard - working, is simply false … reality is more differentiated. cœure : we see the risk of nationalism in european discussions as well, with the temptation to defend narrow national interests. but politicians can overcome this temptation and make progress. take the banking union, for example. it is the most important step to be taken in european integration since the inception of the euro, perhaps more important than the single currency itself. it will have far - reaching consequences for national economic models and national legislation. so there is room for optimism if we succeed in taking that quantum leap forward. isn ’ t that overly optimistic? what can germany and france do to overcome these challenges? asmussen : you have described the challenges rightly, but the answer to them can only be more integration. france and germany have a leading role to play, because they stand at the core of european integration. they jointly, but only jointly, fulfil the definition of a superpower : if