, and in turn provides employment and income and tax revenue, which are the things that really contribute to the macro - economy. as a broad generalisation the wider the range of participants the more efficient the market place. a third major driver of change in our financial systems – as elsewhere in our economies – is, of course, information technology. this has clearly transformed transactions processing, putting a premium on throughput, and encouraging some forms of specialisation and consolidation. it has made possible entirely new – and typically much cheaper – means of delivering financial services making it easier for new entrants to contest existing franchises. it has facilitated the development of new financial instruments and investment strategies, and it has radically changed trading mechanisms. it should also have made it easier for both financial institutions and their regulators to measure, monitor and manage risk. but the electronic revolution, as it applies to our financial systems, has clearly had a very positive impact on the efficiency of all our financial markets and no doubt still has a long way to go. other major drivers include : the effects of rising living standards and the associated increase in financial wealth ; and the consequences of ageing populations in many of our countries with a related emphasis on private pension provision. they include also the impact of fiscal policies which are now typically directed to limiting budget deficits and reducing public sector debt and of monetary policies directed at consistently low inflation as a necessary condition for sustainable economic growth. many of these trends seem likely to encourage a continuing relative shift in savings and investment patterns towards private sector capital market intermediation, although such intermediation will often be carried out by banks or within banking groups. i've no doubt that you can all think of other important drivers of change in our financial systems. and all of this before we even come to emu! now, let me be clear, i agree with those who argue that the single currency – by eliminating exchange risk within the participating countries – can make a significant contribution to increasing the depth and liquidity of financial markets and reducing transactions costs within the eurozone. and indeed it already has had that effect, particularly in money and bond markets, especially the corporate bond market. it has no doubt also been a factor encouraging the tendency to, mostly national, consolidation as financial institutions prepare for greater competition from other euro - based institutions in their national markets. all of this is very positive for the competitive efficiency of euro - zone financial systems both nationally and within the eurozone as a whole. it is in fact

narayana kocherlakota : opening remarks speech by mr narayana kocherlakota, president of the federal reserve bank of minneapolis, at carroll college, helena, montana, 4 september 2014. * * * thanks for the introduction, tom. it ’ s a pleasure to be back in helena – the site of the only branch office of the federal reserve bank of minneapolis. i ’ ll kick things off with some basics about the federal reserve system and some thoughts about fed history. but the plan is for us to spend the bulk of our evening on your questions. one key point before i proceed : the views i express today are my own and are not necessarily those of others in the federal reserve system, including my colleagues on the fomc. in terms of basics about the fed : i like to tell people that the fed is a uniquely american institution. what do i mean by that? well, relative to its counterparts around the world, the u. s. central bank is highly decentralized. the federal reserve bank of minneapolis is one of 12 regional reserve banks that, along with the board of governors in washington, d. c., make up the federal reserve system. our bank represents the ninth of the 12 federal reserve districts and includes montana, the dakotas, minnesota, northwestern wisconsin and the upper peninsula of michigan. eight times per year, the federal open market committee – the fomc – meets to set monetary policy over the next six to seven weeks. all 12 presidents of the various regional federal reserve banks – including me – and the governors of the federal reserve board contribute to these deliberations. however, the committee itself consists only of the governors, the president of the federal reserve bank of new york and a rotating group of four other presidents. i ’ m one of those four presidents this year. in this way, the structure of the fomc mirrors the federalist structure of our government, because representatives from different regions of the country – the various presidents – have input into fomc deliberations. this basic federalist structure has a long history. in fact, this year is the centennial of the opening of the 12 reserve banks and the start of the work undertaken by the federal reserve system. it ’ s been a fascinating hundred years, with many twists and turns along the way. i ’ m sure that many of you have questions about that journey. the answers to all of your questions – and probably more – are on a website that the