increased significantly because of rising financial market pressures, reflecting an intensification of stress in european banking and sovereign debt markets as well as broader concerns about the outlook. these circumstances call for concerted domestic policy actions to boost growth and create jobs. indeed, as i already noted, we at the federal reserve are moving vigorously to promote a stronger economic recovery. however, monetary policy is not a panacea, and it is essential for other policymakers to also do their part. in particular, there is a strong case for additional measures to address the dysfunctional housing market. stronger housing demand has the potential to boost recovery. the congress and the administration also can support the recovery in the near term while simultaneously putting fiscal policy on a sustainable trajectory in the long term. as i have emphasized in this talk, there is also an urgent need for policy action from a number of countries. in europe, forceful action is essential to address the region ’ s fiscal and financial stresses, which pose a threat not only to growth but also to global financial stability. in addition, many emerging market economies, particularly in asia, have the scope to bolster domestic demand. such policies would support stronger, more balanced, and more sustainable global economic growth ; they would enhance social welfare at home as well. the most profound effect of the asian miracle of the past several decades has been to lift hundreds of millions of people out of poverty. further actions to boost aggregate demand in asia will ensure that this miracle is sustained. see, for example, mckinsey global institute ( 2010 ). farewell to cheap capital? the implications of long - term shifts in global investment and saving. mckinsey and company, december, available at www. mckinsey. com / mgi / publications / farewell _ cheap _ capital / index. asp. bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches

##euro area currency risk has encouraged integration in that the “ home bias ” in the equity holdings of institutional investors has been significantly reduced as the importance of sector versus country - based investment strategies has increased. see the ecb ’ s website at http : / / www. ecb. int / stats / finint / html / index. en. html, last update april 2006. as a second measure of the euro ’ s success in fostering financial integration, i would like to mention the work of “ the institutions behind the euro ”, namely the ecb and the whole eurosystem, which provide numerous contributions to european financial integration. overall, we are of the view that financial integration is first and foremost a market - driven process. in addition to this, we see it as a basic task of public authorities to create a framework that is conducive to fostering financial integration. in this respect, the ecb has defined four kinds of activity with which the ecb and the eurosystem contribute to this process : ( 1 ) we try to enhance knowledge and raise awareness of the state of and need for european financial integration, and we measure the progress made – the most obvious example in this respect is the launch of our regular monitoring on the basis of quantitative indicators of financial integration in the euro area, which i mentioned earlier ; ( 2 ) we act as a catalyst for private sector activities by facilitating collective action and assisting with possible coordination problems ; we provide central banking services that also foster european financial integration ; and ( 4 ) we provide advice on the legislative and regulatory framework for the european financial system. let me now also give some concrete examples of the latter three kinds of activity. we can assume the crucial role of acting as a catalyst for market participants ’ activities due to the fact that the ecb, and the whole eurosystem, is in the unique institutional position of being both a public authority with a pan - european remit and, as a result of its basic tasks as a central bank, itself an active participant in the market. as a very recent example in this respect, i would like to highlight the shortterm european paper – or step – initiative, led by aci – the financial markets association and the european banking federation. this initiative aims to promote the further integration of the european short - term securities market via the convergence of standards and practices through market participants ’ compliance with the step market convention. in the coming days, euribor aci and eu