. the political reality is different, though. when a few icelandic banks failed last fall, the funds to cover deposits at these banks ’ foreign branches were not available and many host country authorities had to intervene, not only because of the socalled topping - up arrangement, whereby the host country provides additional cover. although the latter will, practically speaking, soon disappear, the current european system of deposit insurance needs to be fundamentally reconsidered. a situation in which regular retail deposits in a country are not adequately covered should be avoided, not only in the eu, but worldwide. in terms of the core principles, this means that further attention needs to be given to deposit insurance coverage for internationally active banks, as well as to the operational arrangements which should support it. the first issue in particular is a great challenge, indeed, even when banks are just doing well. a final theme is the role of deposit insurance systems in the financial safety net and in crisis resolution. as we all know, the roles of deposit insurers may vary, but the key question, whether or not there is in fact a single “ best ” approach to safety net design, including one ideal model for deposit insurance and bank resolution, has not been resolved. since banking systems differ, the role played by deposit insurance in ensuring financial stability, and the design of that and other elements of the safety net may differ. this institutional variety is allowed by the core principles, but the issue will remain on the agenda. summing up let me sum up. one of the lessons of the financial crisis is that deposit insurance is instrumental in recovering and maintaining financial stability. the core principles were a timely response to the crisis. they will act as a basic reference for countries to use in establishing or reforming their deposit insurance system. however, our experience with the core principles on banking supervision, as well as basel ii, is that truly effective core principles are not a static document, but a dynamic framework. it is not the document as such, but the process – of implementation, assessment and improvements – that counts. the basel committee – and, i am sure, iadi as well – stand ready to contribute to implementing these principles and improving deposit insurance systems everywhere. when i started, i called the core principles a milestone. milestones were a simple but effective device by which the romans orientated themselves. but the core principles are more than that. i would rather consider them to be a global positioning system. they are not a product of rocket

to approximately three children during their lives. after having fallen to 1. 5 children in the mid 80s, this figure is now projected to be only 1. 75 children in the coming decades. secondly, we live longer. at the time the public pension scheme ( aow ) was introduced ( 1957 ), the average remaining life expectancy at age 65 was less than 15 years. nowadays, new aowbeneficiaries expect to receive aow - benefits for more than 18 years on average. r & d - expenditures divided by value added. p. kalaitzidakis, t. p. mamuneas and t. stengos ( 2001 ), ranking of academic journals and institutions in economics, october 2001. source : oecd. marginal tax on labour consists of income tax, employee and employer social contributions as a percentage of total labour costs of average worker. turmann, a. ( 2004 ), a new european agenda for labour mobility, ceps task force report. world bank ( 2006 ), world development indicators, business environment database. source : un ( 2006 ), world population prospects : the 2006 revision. from an economic point of view, both demographic trends are basically good news. having fewer children reduces the scarcity of finite natural resources, which has a positive effect on individual welfare. living longer partly mitigates this effect as individuals use more finite natural resources the longer they live. however, living longer also increases an individual ’ s potential earning capacity over their lifetime. reaping the potential economic gains from living longer requires adjustments, in particular with respect to education and retirement. let me take a closer look at both. living and working longer requires more attention for education both when young and old. young people should be properly educated and the number of school drop outs should be reduced. older people need to get additional education during their careers to keep pace with the latest technological developments. in this respect, it is good to note that this concept of life - long learning is one of the leading principles of education at insead. living and working longer also requires an increase in retirement ages. until recently, most european countries never increased their statutory retirement ages despite the increased longevity of their population. this threatens the sustainability of the pay - as - you - go financed european public pension schemes. germany and the uk have recently announced a gradual increase in the statutory pension age to 67 and 68 respectively. other european countries should also increase retirement ages in response to longevity developments