for the maintenance of price stability and the creation of new jobs. wage growth has been relatively moderate in the past year. the outcomes of recent wage bargaining in the individual member states signal that it will also remain moderate throughout the current year, and possibly next year too. what is required is lasting wage moderation which simultaneously ensures consistency with price stability and allows for net employment gains. in times of high unemployment, this means that real wage increases should not fully exploit productivity increases. by accepting these responsibilities, the social partners would be acting in their own interests. monetary policy needs to, and will, be conducted in such a way that the partners in the wage bargaining process can be confident that price stability will be maintained. overall, the point which i made earlier in respect of monetary policy also holds for other policy areas : there is no reason for complacency. at the same time, with all the appropriate policies in place, the momentum of sustainable non - inflationary growth could eventually be even stronger than is currently anticipated. this would indeed mean a great step for the euro into the year 2000 and beyond. the euro and the financial markets the creation of the euro has accelerated the development and integration of the capital markets in europe, which, in recent years, have also been fostered by financial liberalisation and technological innovation. this also contributes to high growth, as more efficient financial markets help in allocating funds to their best use. in effect, the single currency has removed the exchange risk between the countries of the euro area. it is facilitating the standardisation of debt instruments and their management on a larger scale. this integrative effect of the euro has been most evident in the money market, by virtue of, in particular, the establishment of target, the large - value payment system. this integration has shown itself in, for example, the rapid adoption by the market of reference rates for the euro area, such as the eonia overnight rate or the euribor for maturities of less than one year. above all, we have seen a total convergence in short - term interest rates within the euro area. in bond markets, the integration of markets remains incomplete, owing, for instance, to national differences in respect of taxation, accounting and supervisory regulations and payment and settlement systems. nevertheless, the integration of bond markets is progressing. we have seen european bond indices become standardised. the differences in rates between sovereign issues within the euro area fell substantially in 1998. furthermore, 1999 was characterised by a

luci ellis : opening remarks to plenary panel at the australasian housing researchers conference opening remarks by ms luci ellis, assistant governor ( economic ) of the reserve bank of australia, to the plenary panel at the australasian housing researchers conference, melbourne, 16 february 2017. * * * thanks to stephanie parsons, hannah leal and tahlee stone for assistance with the graphs. i ’ d like to thank rmit and the organisers of this conference for inviting me to participate in this session. i ’ m very glad to be here and to share the stage with dr rogers. looking at the program, i see many interesting papers. a huge range of housing - related topics are represented, many well outside the reserve bank ’ s remit. but housing, as a sector, is crucial to a number of our core policy functions. in financial stability, my old role, housing is certainly crucial. housing is the biggest asset most households will own and the bulk of household sector wealth. lending against housing is also a large part of financial sector assets. housing outcomes are therefore central both to the welfare of households and the stability of the financial system. the housing sector is also crucial on the monetary policy side, my new role. as a sector, it is especially sensitive to interest rates. it is a key part of the transmission mechanism of monetary policy. housing prices respond to interest rates, and in turn affect household consumption through wealth and collateral effects. and the housing construction industry is one of the most interest - sensitive. the theme of this conference is ‘ housing and inequality ’. i ’ d like to talk about two aspects of that. first, there ’ s the inequality – or rather, diversity – between countries. second, there ’ s the inequality represented by the distribution of housing outcomes across residents of a particular country. institutions matter : the cross - country dimension on the first, we can summarise by saying that institutions matter. country - specific features are very important to housing outcomes, including the outcomes most relevant to monetary and financial stability policymakers. a range of institutions determine the idiosyncratic risk that households face, and thus the credit risk they pose to lenders. these include labour market institutions, the funding of health care, and the structure and generosity of the social safety net. geographic and other factors determine the urban structure, which in turn affects the relative price of housing. we know from economic geography that as city populations rise – and the amenities that go