. developing countries therefore have an interest in making sure that the us gets it right. while the global recession will have significant implications for the region, inflation continues to be a regional concern though there is evidence that this should ameliorate in the future. it is our hope that with oil and other commodity prices falling, the region will be a beneficiary of a substantially lower inflation rate in 2009. in some of the caribbean islands, demand growth evidenced by still strong credit, has not dropped dramatically, and in many instances, interest rates are below inflation rates. that is to say, real interest rates are negative ; and this has occurred at a time when banks anticipate heightened levels of delinquencies, and would prudently adjust their credit standards. this has the potential to force individuals to use their savings to cope with normal activities. as a regulator it is important that we encourage the right balance, that is both the concerns of the depositor as it affects his earnings on the one hand, and the borrower as it affects his costs on the other. over the most recent past, we have also seen a tighter level of integration between international markets and regional economies, which is reflected in a higher volume of cross - border financial flows, fdi or otherwise. greater integration between the markets is supported by the emergence of new players, who operate across borders and are often privately - owned, or are subsidiary companies of state - owned institutions. this has important implications for us in the caribbean in the current situation. as we have witnessed, that changes in the global financial markets have the potential to rapidly alter levels of global liquidity. the sharp growth in excess liquidity that started in the early 2000's, and cheaper financing costs which fuelled the export of wealth and capital from the financial capitals to all parts of the globe is now at a premium. this boom in growth, liquidity and employment served to fuel heightened levels of foreign direct investment flows to the region through interests in real estate and other forms of investment. these “ boom ” conditions also led to strong performances in the flow of remittances, which has been a vital component of virtually all regional economies'balance of payments. with the turmoil in the international markets, there has been a liquidity crunch, coupled with the higher - than - usual levels of risk aversion. as a result, access to this kind of funding has contracted sharply. the excess liquidity which we observed in the past few

euro. according to available data for september, the system now processes approximately 3. 5 million domestic and cross - border payments, which have a total value of about eur 20 trillion, per month. moreover, cross - border payments represent 40 % of the value of all target payments. the long future of the euro let me now try to look ahead towards the “ long future of the euro ” and the challenges which the ecb and the eurosystem will have to address. the experience with the short past of the euro justifies expectations that we will gradually see further advances towards a broadening of economic and monetary integration in the future. with the establishment of the eurosystem, solid foundations for a stable currency were laid. maintaining price stability in the euro area helps to gain credibility and the confidence of european citizens in the stability of the euro. this will also contribute to the increased use of the euro outside the euro area. expectations of a long future for the euro seem warranted in light of the increasing confidence of european citizens and international investors in the single currency. the international interest in the euro is indeed evident, for example, from international new bond issues. according to information from the bank for international settlements, the volume of new issues in euro almost doubled in gross terms in the first half of 1999, compared with the same period last year. an important challenge for both monetary policy and economic policies is to maintain noninflationary growth in the euro area. in the forthcoming years - i am confident - we will see that the current recovery has extended to become a period of price stability contributing to prolonged employment and output growth. however, there are important conditions to be met to achieve a substantial and sustained increase in output growth and lower unemployment. first of all, decisive measures to address the structural problems in europe, in particular in the area of labour markets, are needed. second, the consolidation of public finances, which has made considerable progress in the past few years, has to be continued and, where necessary, strengthened. sound fiscal policies make monetary policy ’ s task of maintaining price stability easier. in this context, the stability and growth pact is a crucial element. its aim is to encourage the pursuit of disciplined and sustainable fiscal policies by both the participating eu member states and prospective members. in so doing, it can contribute significantly to the establishment of favourable conditions for sustained economic growth and high employment in the medium term. in the coming years, the success of emu demands that the clear distribution